- Prime Minister Sharif of Pakistan has been making an official state visit to China this week.
- Part of the Prime Minister’s efforts have certainly been aimed at improving the business relationship between the two nations and this has likely led to talks regarding the construction of the trading corridor which China has been undertaking with Pakistan.
- However, because of terror attacks against Chinese workers who have been employed on the project, Pakistan is now in a position in which it must guarantee the safety of the workers from China.
While the meetings between the two nations have unfolded the USD/PKR has remained in a tight price range which is largely known to traders, but intriguingly for speculators may be the technical perception that recent support levels have proven durable at higher ratios. The current posted value for the USD/PKR is near the 278.2300 level.
Intriguing Support and Speculative Thoughts for the USD/PKR
On Monday of this week the USD/PKR demonstrated a low around the 278.1170 ratio, then on Tuesday and Wednesday suddenly support became durable near 278.1310. Intriguingly the higher support levels may produce a hint that the State Bank of Pakistan is doing something slightly different with its Forex maneuvering, but I do not have any inside knowledge of this and it is a purely subjective perspective.
Traders of the USD/PKR know the currency pair is tightly controlled by the Pakistan government. Speculators also know the currency pair does not have a lot of volume and the ability to trade the USD/PKR on a broker’s platform also requires solid risk taking skills which include patience, conservative targets, entry price and stop loss and take profit orders. However, if a USD/PKR trader is tempted to use the current support levels as a trigger to look for higher reversals this is a consideration, but a trader may also want to put their stop loss below the current technical support levels and allow for more freedom of movement.
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USD/PKR Mixed with Politics and U.S Data Considerations
- The trip to China by Prime Minister Sharif may have more effect on the USD/PKR then the coming U.S jobs numbers on Friday.
- Pakistan’s economy remains challenging and if the nation can strike an agreement for better relations with China this may help Pakistan’s economy, which could affect the Pakistan Rupee certainly in the mid-term.
- Traders who want to look for reversals higher in the USD/PKR based on the current higher support ratios should be careful and use conservative leverage.
Pakistani Rupee Short Term Outlook:
- Current Resistance: 278.2600
- Current Support: 278.2005
- High Target: 278.3325
- Low Target: 278.1150
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