The USD/INR continues to test higher resistance and its bullish trends remains intact as risk appetite shows signs of decreasing in the short term.
The Indian Rupee continues to experience a loss of value to the US Dollar. Trading in the USD/INR has not been violent and this suggests the bullish trend which has emerged as buying increases for the US Dollar which has not finished its current short term trend. Yesterday’s trading was able to overcome relatively close resistance and the next juncture above that needs to be watched is the 75.400 level which is not far away from current price values.
If the 75.400 level is broken and buying continues to build for the USD/INR traders may eye targets near the 75.600 mark. A look at a five-day trading chart shows the rather slow but strong momentum the USD has mustered against the INR. What should make speculators also take notice is that the short term trend has ensued as risk appetite was experienced in the global markets. This morning equity indices are struggling to achieve gains and this could set up more tests, and the belief the Indian Rupee will continue to lose value against the US Dollar.
If the higher resistance level of 75.600 is penetrated and the USD/INR’s bullish trend gets energized the forex pair may start trying to test mid-June values which traversed the 76.000 juncture. A three month high for the USD/INR did reach the 76.600 level in April before a selling reversal took place. Economic concerns regarding India’s outlook remain challenging, but traders may assume most of the bad news was already valued into the USD/INR.
So speculators are likely to ask themselves where the biggest amount of movement for the USD/INR will take place in the short term. Because of the recent trend of a stronger US Dollar against the Indian Rupee, even as fairly solid risk appetite was witnessed in global equities, speculators may believe if stock indices turn negative short term that the USD/INR will remain a buying opportunity.
Short term support for the USD/IND looks to be a range between 75.100 and 75.200. If traders can position themselves with limit buying orders within this lower range, they may be able to take advantage of a reversal higher if the US Dollar continues to pick up steam against the Indian Rupee.
Indian Rupee Short Term Outlook:
Current Resistance: 75.400
Current Support: 75.100
High Target: 75.600
Low Target: 74.500