Speculators of the USD/INR should not be fooled by the forex pair’s seemingly calm waters because gaps and spikes have taken place the past couple of days.
A quick view of the current value within the USD/INR would allow outside observers to say a relatively calm range exists within the forex pair. However, the Indian Rupee has experienced a gap higher and a sudden downward spike the past two days which certainly has tested speculative traders use of leverage and limit orders. The Indian Rupee is an emerging market currency and because of its dynamic economic accomplishments in recent years, and the shadow of coronavirus which is currently bringing hardships to India the USD/INR is seeing sudden bursts of short term volatility.
Do not be fooled by what appears to be a consolidated range within the USD/INR if you are a day trader. Risk management is essential and the last two days of trading proves this per the violent bursts that have occurred and the quick reversals which have ensued. The Indian Rupee has certainly offered a rather comfortable range which can be studied technically and used by speculative traders to their advantage. However, traders need to keep in mind the danger of rapid changes in value which can shake their forex accounts based on severe moves.
Resistance for the USD/INR continues to remain strong near the 75.5000 juncture as a high target. Short term resistance however for the USD/INR may prove capable of reversals downward near the 75.3500 to 75.4000 junctures for traders who believe further tests of support levels will develop. A look at a one month chart of the USD/INR continues to show the Indian Rupee is trading within the middle of its range. Risk appetite this morning is showing short term signs of weakness as Asian markets have fumbled slightly within the equity indices. Traders with an inclination to believe risk appetite will reemerge in the markets cannot be faulted because this has often proven to be the case as optimism outweighs negative sentiment.
The Indian Rupee may continue to prove it has the capability to see the USD/INR sell-off incrementally. Resistance continues to look strong above the current price value for the forex pair and there appears to be more room for downwards action, meaning selling the USD/INR in order to profit.
Indian Rupee Short Term Outlook:
Current Resistance: 75.4000
Current Support: 75.1000
High Target: 75.6000
Low Target: 75.0000