The Indian Rupee remains in a rather tight range, but tests of resistance levels have developed the past few trading sessions.
The USD/INR has seen tests of resistance levels emerge the past few trading sessions, but the Indian Rupee is not alone regarding this slight bullish trend which has developed for the US Dollar against emerging market currencies. Importantly for the USD/INR the forex pair does remain within a known value band and the Indian Rupee looks to be a speculative opportunity for traders who believe current price action will not be sustained.
A resistance level of 74.8400 could prove important, but if it is broken higher the 74.9000 could attract a strong speculative flourish. However, if the 74.9000 level proves weak and USD/INR buying continues to find momentum, traders should be aware as recently as mid-July the forex pair did trade for a brief spell between 75.2000 and 75.3000.
The Indian Rupee remains a currency which is dependent on risk appetite. The past week has produced sideways movement in many global equity indices as investors seemingly have started to wonder if the speculative train upwards has become too inflated. However, until a real bearish cycle hits the global equity markets it could prove unwise to disregard the trend too early.
The economy of India continues to show signs of a rebound, but movement among the population remains limited and effected because of coronavirus mandates within different regions. A source of concern in India remains the tight credit market for entrepreneurs seeking to stabilize their small businesses as banks make it difficult to borrow money.
The current value of the USD/INR as a forex pair however is largely affected by international concerns. The Indian Rupee has actually enjoyed a solid bearish trend since the middle of July. Yes, the USD/INR has seen increased buying the past few trading sessions, but the 74.8000 juncture remains an important inflection mark and it has been targeted the past week by speculators.
Speculators’ who believe risk appetite will remain steady globally, may be inclined to look at technical charts of the USD/INR and believe the forex pair is trading near important resistance levels which should be tested with selling positions. The vicinity of 74.8000 to 74.8500 may prove an interesting point to use limit orders and look for short term downside movements.
Indian Rupee Short Term Outlook:
Current Resistance: 74.8400
Current Support: 74.7000
High Target: 74.9000
Low Target: 74.6500