The USD/INR will begin trading near the 82.7100 level when the New Year’s trading begins. Having started December near the 80.9600 ratio, the USD/INR turned in rather fast price action the first week of December achieving a high of nearly 82.7730 the 7th, and then progressing to perform in a rather consolidated manner the rest of the month.
Yes, there was a reversal lower which saw a ‘depth’ of nearly 82.1000 on the 9th of December, but from that point onwards - traders who had become attracted to bearish perspectives likely found a difficult wagering path and poor results. The consolidated price action of the USD/INR since the 13th of December and up until the end of the month, delivered price action largely between the 82.9800 level as a high and a low of 82.3450 a base.
The results of the USD/INR from a technical support interpretation could be defined with a rather solid low of 82.5400 proving durable for the last two weeks of December. The resulting higher range which has stayed within sight of the 83.0000 level as resistance is perplexing simply because the USD has been weaker against many of the other major currencies. The past three weeks of trading in the USD/INR have certainly been difficult to ignite profitable selling positions.
The USD/INR 83.0000 Ratio is clearly a Focus as Resistance
The past week of USD/INR trading has likely been affected by a lack of large institutional trading, due to the holiday season, but this is not 100% clear. Perhaps upon the return of global financial houses in the coming week, a ‘newer’ equilibrium can be delivered. However, the momentum higher in the USD/INR began before the Christmas and New Year holiday season began, so this may prove to be a false narrative and another buying ‘power’ may be in force. The 83.0000 value has clearly been holding as resistance, but will this remain true?
- On November the 11th the USD/INR was trading near the 80.4750 level and the remainder of November was under the 82.0000 price. The 82.0000 suddenly looks durable as support.
- Technical traders who believe the weaker USD in other Forex pairs would ignite more selling of the USD/INR may have to reconsider their opinions.
First Week of January needs to be monitored within the USD/INR Closely
Speculators of the USD/INR should be very careful in the coming days. Without full volume in the USD/INR volatility could certainly break out, and if consolidation suddenly collapses the move in the currency pair may be lethal for small speculators who are not using proper risk management. It may be wise to watch the trading of the USD/INR for the first couple of days of trading in January as a way to gain more insights. If the USD/INR incrementally continues to stumble lower and challenge the 82.6000 to 82.5000 values near-term, this may be a positive selling development. However, the ability of the USD/INR to remain highly valued is troubling from a bearish perspective. Timing the moment the USD/INR finally starts to traverse downwards and sustain a lower slope has become an expensive problem for many wagering on a selling direction.
USD/INR Outlook for January 2023
Speculative price range for USD/INR is 80.7500 to 83.4200
If the USD/INR were to break below the 82.5000 mark and speed up selling momentum, and sustain incrementally lower resistance this could spur on more selling. While it looks appealing to dream about the potential of a fall in value to the USD/INR it has simply not developed yet. The USD/INR would have to break below the 82.0000 ratio and see sustained trading below to gain the confidence of large group of bearish traders with a great exuberance.
January could prove to be a very volatile month for the USD/INR considering its strong consolidation the past three weeks. The inability to climb above the USD/INR is not a guarantee it will not happen. The USD/INR traded above the 83.0000 in the third week of October and the currency pair may have influences which are unknown that cause it to occur once again. While the upside may seem limited, traders may feel tempted to look for reversals higher that continue to flirt with resistance. The USD/INR needs smartly chosen risk taking tactics in the weeks ahead.
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