The USD/INR practiced a sustainable fair market price range which allowed traders to ride short term trends in October. Technical traders have clear support and resistance levels which can be used to take advantage of potential reversals when the USD/INR signals it has traversed too high or too low within its known price range. While this doesn’t mean trades have guaranteed outcomes, it does mean that patient traders have the capability to find opportunities with speculative positions.
The 73.0000 to 73.8700 value band for the USD/INR has proven resilient the past month with only brief outlier encounters. However since the 12th of October the USD/INR has produced an incremental bullish trend which it is still within as November approaches, and resistance around the 73.8700 and 73.9100 junctures should be monitored. Global risk appetite is fragile as investors brace for the US presidential election and fear of the unknown has certainly helped sparked some weakness in some emerging market forex currency pairs.
While the Indian Rupee may see more bullish behavior against the USD it should be remembered that the USD/INR has actually achieved a fairly solid bearish mid-term trend and this development may not be ready to reverse. Yes, the USD/INR will certainly see brief reversals higher as risk adverse cycles take hold within the forex pair, but the Indian Rupee has also proven the ability to trade towards lower values and has touched the 73.3000 to 73.1300 junctures below consistently.
Before traders rush into the USD/INR and choose positions they should also acknowledge the forex pair does deliver swift movements occasionally which can be described as sudden spikes. To guard against volatile gyrations, speculators should use limit orders with the USD/INR, and the use of take profit and stop loss orders is a wise choice too.
Having warned speculators about the dangers of potential changes in direction, it is time to point out the short term movements of the USD/INR are also technically proficient when delivering solid trends. Yes, the US election may cause the ‘risk adverse’ to buy the USD/INR, but at some juncture calm will be restored and the global markets will likely turn from being cautious to optimistic again. This may mean the USD/INR will turn around from its current bullish move upwards which is testing resistance and begin to display bearish sentiment.
The junctures of 73.8700 and resistance marks above this value are likely to spark selling momentum if tested. Speculators who believe the USD/INR is due to retest its lower values can certainly try to use these resistance levels above as stop loss ratios when selling the forex pair. A high of nearly 74.0000 was seen on the 24th of September, but the USD/INR tested lows near the 72.8500 mark on the 12th of October. Having traversed higher since the October low values, it now may be the time to begin looking for another reversal lower.
Traders will need to be careful regarding the US election which is certain to cause short term volatility in forex. However when the dust settles and the presidential vote’s outcome is decided, traders may want to wager on risk appetite returning and the resumption of bearish momentum within the USD/INR.
USD/INR Outlook for November:
Speculative price range for USD/INR is 72.8700 to 74.1400.
Support at 73.5100 could prove very vulnerable and below the 73.2800 continues to be an inflection point and if trading is sustained below this value the next target is 73.1200 and 72.8400.
Resistance at 73.9100 may prove strong; however the 74.0700 and 74.1300 levels above indicate higher lines of defense and potential targets.
