The USD/INR will begin January trading near the 83.1700 ratio which is lower than the 83.3000 vicinity the currency pair began December with for speculators. The price of the USD/INR can certainly be said to be ‘resting’ in a lower price realm. A low of nearly 82.8800 was briefly touched on the 15th and 18th of December, as the global Forex market demonstrated the widespread belief the USD outlook was weaker while taking a look into the mid-term.
The weaker USD outlook persists in many Forex circles, but traders of the USD/INR need to understand the Indian Rupee is closely protected by the Reserve Bank of India which gets its mandate regarding the management of the USD/INR from the India government. A not-so-soft grasp of the currency pair’s value is managed in what can be described as a rather strong demonstration of market manipulation.
The USD/INR and the Broad Forex Market
The USD/INR is not trading in a correlated manner with the broad Forex market. Despite the Indian Rupee becoming an increasingly important global currency pair in the world’s economy, the USD/INR remains technically within the higher boundaries of its mid-term range compared to many other major currency pairs. While many other major Forex pairs are now challenging early August 2023 values, the USD/INR remains seemingly locked above the 83.10000 price level, and attempts to take the currency pair lower have been met by swift amounts of buying.
The USD/INR was trading in a range of nearly 81.6000 to approximately 82.9000 from February 2023 until August 2023. A simple look at a six-month chart compared to a one-year chart shows interesting price dynamics. Yes, the USD has been strong over this period, but the past month and a half of trading in many major currency pairs has produced solid reversals. Strong selling has not occurred significantly for the USD/INR quite yet. The currency pair it can be argued remains closer to its highs than it does to its mid-term lows when a six-month chart is inspected.
Can Speculators Wager on the USD/INR Safely?
- While traders of the USD/INR may believe the currency pair should be trading at lower values, the ability of downside momentum to take hold and produce sustained selling remains questionable.
- Traders who want to attempt selling positions should understand they are not competing in an ‘open’ Forex market with the USD/INR.
- The Reserve Bank of India is capable of demonstrating a strong grip on the value of the USD/INR depending on what they feel is needed to help the Indian economy.
USD/INR Outlook for January 2024
The speculative price range for USD/INR is 82.8700 to 83.3900
While it would be logical to think the USD/INR price realm which has been achieved with a slightly lower stance in the past two weeks should be maintained and more selling will be seen, traders cannot bet blindly on the USD/INR to simply move lower. Support levels near the 83.1500 to 83.1000 marks need to be watched carefully. Trading below the 83.1500 level would have to be produced and then incremental and solid sustained movement lower would have to be displayed to believe the USD/INR will be allowed to incrementally decrease.
Traders should use entry price levels with the USD/INR to guard against the potential of sudden price changes due to the large invisible hand that controls the currency pair. The opportunity to seek lower price values is intriguing, but traders participating in the USD/INR should use realistic take profit and secure stop-loss orders to protect their money. Speculators may believe the downside is the proper wager in the USD/INR, but they need to understand the dynamics of the currency pair are controlled. Not all things will make sense for day traders who are trying to compete in a Forex market that is not geared towards their favor with the USD/INR.
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