Trading the USD/PKR the past few trading sessions has proven to be a roller coaster ride for speculators.
The USD/PKR has tested higher resistance and lower support levels the past few trading days and has proven the importance of solid risk management. Speculators wise enough to use limit orders to enter positions and aim correctly for taking profit levels, while also using stop loss junctures may have survived the past few days of trading within the Pakistani Rupee and even have accumulated profits. However, traders who tried to enter the market without a clear strategy likely were hurt.
Resistance levels of 168.0000 were attacked suddenly late last week and then like a sudden plunge on a roller coaster the USD/PKR nosedived and broke short term support testing lower boundaries within its value range. Before going into the weekend the USD/PKR saw a wave of selling which took approached the 165.5000 juncture, meaning if you were using too much leverage and on the wrong side of the trade you are likely not in the best of moods early today.
The last two days of trading within the USD/PKR proves that it is a playground for speculators with deep pockets, experience, and the ability to use proper risk management. Traders who do not have these three characteristics listed and decide to trade the Pakistani Rupee can be defined as adventure seekers who do not believe in safety nets. Because of the past few days of trading in the USD/PKR a rather vast void exist regarding appropriate resistance and support levels regarding taking profit and stop-loss targets.
Risk appetite in the global markets appears to be increasing and this current wave of sentiment exists even as statistical evidence suggests coronavirus and its economic impact internationally remain hard to quantify regarding an end game. The USD/PKR will continue to gyrate and traders need to look at technical charts and gauge their merits carefully. Short term resistance near the 168.0000 mark appears logical, while support around the 165.5000 juncture can be justified. Experienced traders will note that the difference between these two levels leaves a vast amount of basis points between the two values, meaning extreme caution is needed regarding leverage and the use of limit orders are vital.
So what should you do? The test of higher resistance and then sudden reversals sparked lower may cause a speculative trader to believe a further test of support levels is in the cards, meaning selling the USD/PKR short term could prove worthwhile, but traders of this currency pair better enjoy roller coaster rides.
Pakistani Rupee Short Term Outlook:
Current Resistance: 168.0000
Current Support: 165.5000
High Target: 168.5000
Low Target: 165.0000