USD/INR Forecast: October 2020

Robert Petrucci

After a strong bearish move in late August and early September the USD/INR finds has sustained its new range.

September has actually produced a slightly bullish run higher for the USD/INR, but this has developed after the forex pair hit a low water mark of 72.7000 on the 1st of the month. Since hitting this important support level the USD/INR has incrementally raised to its current price vicinity which has seen it trade largely between the 73.4000 to 74.0000 marks the past week.

The forecast for October regarding the USD/INR indicates the forex pair may be inclined to battle its current range which may be a comfortable equilibrium. Global risk appetite has taken on a mixed flavor the past couple of weeks and this may continue to be the theme worldwide as investors and institutional financial houses start to turn conservative as the US elections approach. Yes, India is a nation onto itself, but its economic outlook like many countries is affected by global trading sentiment.

The ability of the USD/INR to touch low water marks near the 72.7000 level in early September could be experienced again if a strong dose of optimism were to occur worldwide. It should also be pointed out that the last week of August and first week of September produced swift trading in the USD/INR which may have startled speculators due to its rapid pace downwards and then relatively fast reversals higher. However, since the 9th of September the USD/INR has produced somewhat calmer results.

Speculators must be wary of volatile trading within the Indian Rupee, but the past couple of weeks have produced less drama, which makes the USD/INR easier to trade.  However, it is a good practice to use limit orders within the USD/INR to be protected against sudden spikes.

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The USD/INR continues to offer solid technical trends to pursue. The current price range of the forex pair looks like a rather solid value band and it may be sustained during October.   Critical inflection points for the USD/INR look to be the 73.3000 support level which could signal further bearish momentum if trading near this juncture holds. Resistance near the 73.8000 level should be watched too, if this level is broken higher traders may have the target of 74.0000 in their sights.

In the first week of August the USD/INR was trading above the 75.0000 level, so traders should acknowledge the higher levels which recently have been experienced and does leave the door open to potential reversals higher from the forex pair’s current price action. A rise to the level of 75.0000 does feel rather distant however, and it would take a solid amount of bullishness to test this juncture. It seems likely that his rather high value could only be tested if global risk appetite collapses in the coming weeks.

Speculators should be braced for a test of the current price range which may straddle the middle of the road.   Meaning traders may see trends develop technically and take advantage of cycles which could last a week or two with rather comfortable price action allowing for limit orders to test momentum while looking for profits. From a speculative perspective it appears the 73.2000 to 73.9000 levels could dominant as a range in the coming month.

USD/INR Outlook for October:

Speculative price range for USD/INR is 72.6000 to 74.6000.

Support at 73.2000 is an important mark if taken lower the USD/INR could test early September low junctures within the 72.9000 to 72.6000 range.

Resistance at 74.0000 appears adequate, but if broken higher the USD/INR could challenge 74.6000.

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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.

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