After testing important support levels earlier this week the USD/INR has reversed higher with incremental buying. However, the known range of the Indian Rupee remains largely intact and will allow speculators opportunities to test the waters of the USD/INR forex pair. The Indian Rupee certainly remains highly susceptible to domestic sentiment generated because of the coronavirus pandemic, but the Indian government is maintaining a proactive stance as it tries to manage its massive population and keeps its economy progressing.
Support for the USD/INR for short term traders appears to be 74.400 this morning, but that juncture could prove very vulnerable if downside momentum is achieved with any renewal of selling activity. Lows of 74.150 were tested only two days ago and this juncture could be a legitimate focus if you are looking to be a seller at current price levels. While domestic issues certainly weigh into the value of the USD/INR, global risk appetite is a larger factor for the forex pair. Current markets conditions are mixed for equity indices and the cautious approach being shown internationally may provide speculators a chance to place their trading positions within the USD/INR in relative comfort.
Resistance around the 75.000 level appears to be strong, but if this mark is broken upwards it would signal more volatility could be found and a level of 75.400 to 75.500 easily explored. The fact that the USD/INR has actually created a bearish trend since the middle of June could be a concern. Risk adverse traders may sense the USD/INR could reverse, meaning the USD will be bought and resistance of early June be put to the test. However, short term traders probably do not have to fear a violent bullish buying parade to suddenly emerge.
The past week of trading for the USD/INR has largely been between 74.200 and 75.200 and current values do not indicate a sharp move. While a breakout is always a possibility, traders who use adequate risk management should be looking for the short term to merely test known support and resistance levels, particularly if global risk sentiment remains cautious.
The next two days of trading for the USD/INR should provide speculators with the ability to use limit orders and sell the USD/INR when the price of the currency pair touches known resistance. Within the values of 74.700 to 74.800 the USD/INR looks to be a speculative selling opportunity for traders using take profits near the 74.300 to 74.400 target zone.
Indian Rupee Short Term Outlook:
Current Resistance: 75.000
Current Support: 74.400
High Target: 75.150
Low Target: 73.900
