August trading reached a high of 80.1400 yesterday, which tested apex values seen in the second week of July. The high water mark achieved on the 14th of July which touched the 80.2200 level momentarily was not seriously threatened yesterday, but the result highlighted the rather large track of territory the USD/INR currency pair has traversed the past four weeks. On the 2nd of August the USD/INR tracked to a low of nearly 78.3770 which it had last experienced on the 28th of June.
August Lows were Quickly Brushed Aside and the USD/INR then Reversed Higher
After starting August with a bearish trend which picked up steam on the 27th of July, the lows reached in early August quickly vanished. A strong surge of buying erupted and a high of around 79.8000 was touched on the 4th of August. As of this writing the USD/INR is near the 79.5000 mark. Choppy trading has been demonstrated the past handful of weeks and this will likely remain a topic of debate. The USD/INR remains well within the upper range of its long term charts technically.
- Traders need to be prepared for additional spikes in the USD/INR; this can be guarded against by using good entry price orders and risk management.
- The rather wide range of the USD/INR may continue to see sweeping quick hitting trends and sharp reversals in the coming weeks if global markets remain nervous.
Having Tested Highs only Yesterday, USD/INR Speculators need to be Prepared
Simply following the massive trend upwards in the USD/INR may seem easy to understand, but actually taking advantage of the swirling values is much more difficult. The USD/INR suffers from sudden reversals which can knock day traders out of their wagers rather easily. The use of conservative leverage, slightly wider stop losses compared to relatively close take profits, and the ability to monitor trading of the USD/INR is important for day traders. Momentum trading under the present conditions may be a solid way to speculate, but it carries risks too. Reversals can develop quickly in the USD/INR.
Support is being tested now in the USD/INR and the 79.5000 level should be watched carefully. If this area proves vulnerable the USD/INR could see a move towards the 79.4000 vicinity rather quickly. The global financial markets are nervous and this is being reflected in the USD/INR as it traverses near its upper values and sometimes experiences sharp reversals lower when financial houses likely believe the currency pair is overbought. However, the unclear outlook regarding the interest rate policy from the U.S Federal Reserve continues to shadow the Indian Rupee like many of the other major emerging market currencies.
USD/INR Outlook for September 2022:
Speculative price range for USD/INR is 78.0900 to 80.3200
Traders should remain realistic regarding their targets when speculating on the USD/INR. Seeking to take advantage of moves by looking for reversals may seem legitimate, but it is also dangerous to fight against the trend if it continues to establish incremental moves higher. If the current 79.5000 level falters and price realms can be sustained below this may cause some speculators to believe the 79.4000 to 79.3000 targets are solid goals short term.
Traders should be willing to cash out profits when they are made and not hold on too long. Profits which can be seen on a trading platform can quickly vanish if the market changes direction. Having targets selected before a trade is entered into is a solid way to manage risk and expectations. Lower moves may occur, but just how far the USD/INR can sink compared to continue challenging its upper range remains an important question under the present global conditions for traders. The 78.9000 level feels far away and was last seen on the 4th of August.
While the USD/INR may look overbought if it trades above the 79.8000 realm, short term traders may be tempted to bet on more upside movement if prices can be sustained above this level. The range of the USD/INR may continue within the upper tier of its long term charts for a while. If the 79.8000 value is maintained, then looking for 79.9000 to 80.0000 is not farfetched. If the 80.0000 is broken higher and sustained for a few days, the USD/INR could be signaling additional ground higher is going to be captured in September.
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