USD/PKR: Speculators May Take a Short Chance

With optimistic risk appetite rising, the Pakistani Rupee may find itself attracting speculators willing to risk shorting the USD/PKR.

The USD/PRK has actually found a slightly bearish trend develop the past couple of days. The government of Pakistan still faces many hurdles, so it may not want to celebrate the stronger Pakistani Rupee quite yet, but speculators may see an opportunity if risk sentiment globally continues to build and slight positive downward motion for the USD/PKR sustains itself in the short term.  The resistance of 168.0000 has proven itself to be strong the past week, and support levels have actually been tested with more frequency via technical charts and maybe even showing vulnerability.

Support around 166.5000 has been broken a couple of times recently and the USD/PKR has tested the 166.0000 juncture and even touched the 165.0000 value with a quick violent burst of selling before reversing higher. Speculators should know before opening a position with the USD/PKR that it must be done with deep consideration, an acknowledgment about potential volatility, and a carefully chosen limit order.

If a trader is going to sell the USD/PKR because they believe global risk sentiment is ready to spring forward and create positive momentum for the Pakistani Rupee they should also be precise regarding their outlook regarding timeframe. While it is wonderful to be optimistic about global equity indices marching forward with gains and a belief emerging market currencies are not only going to stabilize but add value, it should also be acknowledged some nations face more challenges than others.

Pakistan is a country that still has many issues it must tackle and the Pakistani Rupee has suffered because of the perception the nation will continue to struggle. However, the past few days of trading have certainly shown an ability to sell the USD/PKR and test support levels. The next couple of days may provide an opportunity to see if support levels can be targeted and made to be profitable.

Traders who are willing to risk selling the USD/PKR, also need to use wise take profit targets via their forex platforms and have the values securely positioned. Because sudden reversals with the Pakistani Rupee are not about to disappear and it remains a speculative forex pair to trade. If a trader can enter the market with a selling position of 166.8500 to 166.9000 and has enough emotional fortitude to wait for support to be tested below, now may prove a dynamic time to test their perceptions about risk appetite in the global forex markets.

Pakistani Rupee Short Term Outlook:

Current Resistance: 167.5000

Current Support: 166.5000

High Target: 168.2000

Low Target: 165.5000

USD/PKR

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.