The USD/INR has produced a solid bearish trend the past week of trading and the Indian Rupee has made short term support levels appear vulnerable consistently. Support near the 74.4500 level may become the next target for speculators if they continue to test the downside momentum produced by selling the US Dollar against the Indian Rupee. Risk appetite globally appears optimistic early this morning and if sentiment remains steady there is reason to suspect the USD/INR may merit further consideration to pursue selling positions.
While concerns shadow India because of the impact from coronavirus, the government has pursued their attempts to reopen the economy in order to stabilize the negative effects on economic growth which have definitely been felt in the nation. A recent report on the domestic banking sector indicates interest rates charged by banks to clients remains alarmingly high, which doesn’t help the desire for investment and business creation. However, Indian leadership has been fairly transparent regarding its fiscal policy and it remains proactive regarding its economic vision.
Speculators will notice that resistance junctures for the USD/INR have progressively declined technically and the 74.8500 level currently appears like a level that may be used as solid barrier. The Indian Rupee remains a potentially volatile speculative trade at all times, there are no guarantees that a sudden breakout will not occur. However, if a trader decides to short the USD/INR within a price range of 74.6500 and 74.7500 in order to seek additional downside momentum they cannot be faulted. Support targets near 74.4500 to 74.5500 appear to be realistic targets if risk appetite remains steady in the global markets.
However, the USD/INR has shown plenty of reversals near the 74.5000 level the past few months. Although the Indian Rupee has tested values near the 74.3000 level earlier in July it was not able to continue its downward momentum when tested and it did reverse higher.
Speculators looking for further downside action should use limit orders if they are selling the USD/INR in order to capture profits and safeguard against sudden spikes upward. A trader could also use a limit order to protect their profits under their initial selling position’s value to stay in a trade if they believe the USD/INR has the potential to produce further downside action.
Indian Rupee Short Term Outlook:
Current Resistance: 74.8500
Current Support: 74.4500
High Target: 75.1000
Low Target: 74.3200
