The USD/INR was trading near a high around the 82.7550 ratios last Friday as the currency pair likely continued to make speculators who were attempting to sell rather frustrated. However, like a bolt of lightning, U.S inflation data on Friday of last week came in below expectations via the Hourly Earnings report causing the USD/INR to begin stumbling. The USD/INR went into the weekend near the 82.5050 ratios.
On Monday of this week, the USD/INR gapped lower on its opening and essentially began its day near the 82.1200 level. And late in the day yesterday the USD/INR was trading near 81.5500 vicinities. As of this morning, the USD/INR has continued to see fast price action with slight reversals being demonstrated lower and higher in choppy conditions.
The Speed of the Slide Downwards is a Warning for USD/INR Traders Tomorrow
While some bearish traders may be quite proud of their results the past week if they were able to catch the downward momentum, tomorrow is another day. Profits made last week should be banked and stored safely away if they were accomplished. Trading today and early tomorrow in the USD/INR could prove to be troublesome. Important U.S Consumer Price Index numbers will be published late tomorrow and these inflation statistics will impact Forex including the USD/INR.
- Inflation numbers from the U.S. are now in the spotlight and a key ingredient for speculative wagers because the results serve as an outlook regarding the U.S. Federal Reserve interest rate policy.
- The last time this morning’s lows near the 81.5300 ratios were touched was in the first week of December.
Deeper Lows may Appeal to Bearish USD/INR Traders Still
Even though the USD/INR has produced a solid downtrend the past few days, bearish speculators who are looking at three month charts may feel there is room to explore lower depths and they cannot be blamed. However dangerous waters are ahead for the USD/INR over the next day and a half because of the U.S CPI results which will be published late on Thursday. Choppy conditions can be expected today and early tomorrow as speculative positions are placed wagering on the results of the inflation statistics before the report is official.
Traders need very solid risk management today and tomorrow in the USD/INR. When volatility breaks out and it will, the USD/INR will move fast. If the U.S. inflation numbers are weaker than anticipated late tomorrow the currency pair could react with an additional selloff.
However, traders need to consider the phrase – buy the rumor and sell the fact. If traders who believed the U.S. inflation numbers are going to be weaker than expected have already placed their wagers, their selling positions are then already active. Meaning that even if the numbers come under expectations via the CPI late tomorrow, the USD/INR could react in a manner that seems quite confusing until the dust settles and financial houses start to pivot their positions later, this is because folks who already had selling positions on may cash out of profitable trades early during the chaos to come.
USD/INR Short-Term Outlook:
Current Resistance: 81.7700
Current Support: 81.5300
High Target: 81.9500
Low Target: 81.3440
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