- The USD/INR at the time of this writing is near the 83.8600 ratio and showing rapid fire changes in value as it continues to boil within the higher elements of its long-term price range.
- The ability to create new apex values and establish an upwards price realm has been rather consistent for the USD/INR since early March of this year.
- A high in August topped the 84.1000 mark briefly on August the 5th, but this occurred when the Asian markets were overreacting to price velocity in the USD/JPY and a selloff in the Nikkei equity index in Japan.
- Calmer heads prevailed and forex returned to ‘known’ values within a day.
However, following the rapid movement of the USD/INR higher on the 5th of August, something curious happened in the USD/INR because it didn’t really go back to the price range it had been displaying before. Suddenly from a technical standpoint the 83.7700 vicinity was no longer support and the 83.8600 realms began to act as support, this until around the 16th of August when the USD/INR began to test slightly lower values. A low for the USD/INR was seen on the 20th of August around the 83.6820 ratio, before quickly vanishing.
USD/INR Mid-August Lows Followed by another Incremental Rise
While the low of mid-August may have enticed some day traders to believe the Reserve Bank of India was going to suddenly change policy and allow the Indian Rupee to gather strength this did not happen. The broad Forex market has shown USD centric weakness, but the USD/INR has sustained its higher price range and in fact continues to show evidence that higher price realms may be found tolerable by the Indian government.
The notion that the USD/INR as of this writing slightly before September trading gets underway remains near the 83.8600 vicinity is an indication higher exchange rates for the currency pair may be intended. The U.S Federal Reserve is 100% going to cut its Federal Funds Rate in the middle of September, this has been priced into major Forex pairs globally, but it has not happened in the USD/INR. Day traders should not be betting on a sudden reversal in the USD/INR lower.
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USD/INR Higher Prices are Possible in September
The ability of the USD/INR to linger within sight of the 83.9000 realm is not an accident. Behavioral sentiment seems to suggest the Reserve Bank of India is slowing presenting the constant reality of a potentially higher price realm in the USD/INR. At some point the India government likely fears a backlash from the public if the Indian Rupee is allowed to weaken too much, and by allowing the USD/INR to press up against resistance on a daily basis this might be a way to tests opinions. India and export enterprises may like the weaker Indian Rupee as a way to grow demand. However, it also is causing inflation pressures inside of India.
USD/INR Outlook for September 2024
Speculative price range for USD/INR is 83.6700 to 83.9900
Wagering against the bullish incremental climb in the USD/INR may prove difficult for day traders. Yes, reversals lower are certainly constantly seen via intraday trading parameters as support and resistance is fought over. However, the slow creeping upward path of the USD/INR over the past handful of months remains evident. Traders may be more inclined to use support levels to look for small quick hitting moves upwards.
Speculating on the USD/INR inside of India remains hard at best because of the strict mandates eliminating trading on the currency pair. However, traders with accounts outside of India certainly trade the USD/INR via brokers who are based internationally. Strong risk management is needed for the USD/INR. The inability of the USD/INR to create downwards momentum the past week even after the U.S Fed observed it needs to become dovish is a sign upwards value still may be expected by financial institutions in India.
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