As global risk appetite continues to remain steady and equity indices maintain an optimistic sentiment, the USD/INR has lingered near important support levels. In early trading this morning the USD/INR has experienced a slightly bullish reversal higher, but the Indian Rupee continues to look like it has no intention of challenging higher resistance levels in the short term. I may regret writing that sentence, but resistance near the 74.8500 juncture does look solid technically via a five-day chart and with a perceived belief risk sentiment will remain durable, shorting the USD/INR remains alluring.
Short term support levels have proven tough around the 74.4000 the past day, but the USD/INR has touched the 74.2000 juncture below recently and speculators may be tempted to target this mark the next couple of days. After starting July with a bullish trend upwards which essentially tested high water junctures near 75.35000, the USD/INR has developed bearish sentiment and the question is if its current momentum will test support near the 74.1500 mark, which may be too optimistic.
Speculators have a rather polite range to contemplate with the Indian Rupee the past month, which has provided opportunities to pursue short term trends. This morning’s push higher has the USD/INR trading near the vicinity of 74.5900 to 74.6200. This level could prove an interesting area to engage in a short position with a carefully placed stop loss near 74.8600. Use your leverage wisely.
Why do I say to place a stop loss above the potential high target resistance level of 74.8500 which I have listed in my short term outlook below? Because trading systems could be ready to trigger reversals around the 74.8500 price value and keep the 74.8600 juncture potentially safer if programmed software isn’t geared to attack this level. However, another key point is that technically it looks like the 74.8000 to 74.8500 if challenged could spark reversals downward, which actually may tempt patient traders who want to use these levels to place their positions selling the USD/INR.
Traders need to gauge risk-reward scenarios while speculating. The USD/INR at its current price values looks to have more opportunity to reassert a short term bearish trend and test support levels with the potential for better profits based on the size of its possible move. This is different when compared to a move upwards, which seems to have rather strong short term resistance hovering nearby.
Indian Rupee Short Term Outlook:
Current Resistance: 74.7000
Current Support: 74.4000
High Target: 74.8500
Low Target: 74.2000
