On Friday the 29th as July’s trading concluded, the USD/INR touched the 79.1600 vicinity, this after touching a record high value of nearly 80.2100 on the 14th of July. Speculators were promised a high degree of volatility last month and it was delivered with abundant opportunities for wagers. However, the art of successful trading includes eliminating risks, and trying to make the pursuit of speculative positions of the USD/INR more favorable.
Traders need to pull out long term technical charts to view the bullish trajectory the USD/INR currency pair has been tracking. On the 12th of January 2022 the USD/INR was essentially trading near the 73.6500 ratio. If you want to look even further back, the USD/INR was trading near 72.9000 on the 31st of August 2021. However traders should not be tricked into thinking there has only been a one way avenue upwards. Plenty of choppy trading has happened, packed with wicked spikes downward. Holding onto a long term position of USD/INR is nearly an impossible task except for financial institutions because of the volatility and costs of overnight positions for retail traders.
After Apex Highs, Reversal Lower Sparks with Lightning Speed for Retail Traders
The USD/INR has mirrored many of the major currency pairs. The highs touched on the 14th of July for the USD/INR also happened for the USD/JPY and even the USD/ZAR. Technical traders may not want to hear this, but most of the major currencies paired with the USD found similar fates due to behavioral sentiment, as financial houses positioned their holdings according to outlooks being generated by U.S Federal Reserve interest rate policy.
- Highs of the USD/INR have seen quick reversals lower the past few days, and early August could produce choppy conditions.
- Trading reflects other major currency pairs and volatility will likely continue, meaning traders need to have their risk management ready when pursuing the USD/INR.
Trading Conditions are Speculative and Volatility will continue for the USD/INR in August
The roaring bullish trend of the USD/INR may have been able to put in apex highs in the middle of July. And speculators may be right if they believe lower support ratios will spur on higher reversals again, but if buying positions are being pursued it may be wise to keep ambitions realistic in August.
The hike of interest rates in the U.S this past Wednesday was clearly anticipated by the financial markets, when the hike of 0.75% happened, the USD/INR definitely did begin to sell off. Yes, a move higher briefly occurred which brought the USD/INR currency pair within sight of the 80.0000 mark again, but rapid selling then ensued and built speed, suddenly support levels were being tested.
USD/INR Outlook for August 2022
Speculative price range for USD/INR is 78.3400 to 80.1600.
It is easy to write that traders should expect choppy conditions and that risk management is important. However, these are not meaningless words, because the USD/INR has now entered a trading terrain which may prove difficult during the month of August. Having touched support levels on Friday, as the USD/INR opens for large volume trading this Monday it will prove intriguing to see if currency support levels hold value and a slight reversal higher occurs.
Traders may want to pursue quick hitting positions in the USD/INR that keep realistic targets. The USD/INR provides fast conditions and spikes should be expected over the opening days of August as financial houses search for equilibrium. If the USD/INR were to fall below the 79.2000 mark and begin to show the 79.0000 level is vulnerable, lows seen in the early part of July may come into play. However, expecting a swift lower move penetrating 78.7000 to 78.6000 may be hoping for too much by sellers.
Speculators who suspect the long term bullish trend of the USD/INR may reemerge may be correct, but the next few weeks of trading may be light on economic clarity. Instead it may be wise to pursue buying positions if support starts to look durable, and technical perceptions believe the USD/INR has been oversold. Moves towards 79.6000 and 79.8000 would be of interest, but expecting the USD/INR to break the 80.0000 ratio and sustain values above may be too wishful over the next few weeks.
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