The past five days of trading within the USD/INR have offered speculators a tight trading range with just enough price action to take advantage of its limited movements. A range between 74.6000 and 74.8000 has dominated trading the past week and traders who use limit orders wisely have an opportunity to continue pursuing this price action.
The past month of trading has also seen a rather polite band of value largely between 74.4000 and 75.1000. Interestingly after hitting a quick high water mark of 75.1300 in early August, the USD/INR has produced incrementally lower resistance levels, although it must be added that support junctures have not faltered. The question speculators should ask is what trend the Indian Rupee will be influenced by the most?
Although a consolidated range has certainly been displayed, bearish momentum seems to be the dominant theme within the USD/INR. Selling the USD against the Indian Rupee remains an appetizing option to consider, particularly when the forex pair trades within the vicinity of 74.7500 and 74.8000 because a rather strong resistance juncture near 74.9000 has proven adequate. Speculators may want to look for support targets near the 74.6500 to 74.6000 to place their take profit orders if they have sold the USD/INR at higher junctures.
Risk appetite in the global markets appears rather steady; in fact, it has shown signs of increasing recently. While the past couple of days have provided mixed trading on many equity indices, steep selloffs have not taken place on most major exchanges. This highlights that investors may continue to seek out emerging market assets that could benefit currencies like the Indian Rupee. While the past month of trading for the USD/INR has been rather tranquil and seen plenty of sideways action, the mid-term trend technically for the forex pair has demonstrated solid bearish momentum.
Speculators should be careful not to get greedy when trading the USD/INR. If they have taken advantage of its price range and achieved profits while pursuing short term selling positions, they should cash in their winnings so reversals do not eliminate what were solid trades. Because of the recent consolidated trading in the USD/INR, it will likely prove worthwhile to engage in short term trades that pursue quick bearish trends.
Indian Rupee Short Term Outlook:
Current Resistance: 74.8300
Current Support: 74.6000
High Target: 74.9500
Low Target: 74.5000
