The USD/INR has traded higher the past week and broken through resistance levels with relative ease. Before going into the weekend the USD/INR created a late surge upwards which saw the forex pair go from the 73.6200 to 73.8300 juncture in a dynamic manner. However in early trading this morning the USD/INR has come off of these highs and traversed lower back into the 73.7000 vicinity.
While the USD/INR has maintained a comfortable range for speculators with rather stable support and resistance levels to wager, the forex pair has also been barraged by sudden spikes upwards and downwards on occasion. The value of the USD/INR appears to be traversing beneath critical resistance levels which may prove adequate based on the forex pair’s ability to mostly trade within the 73.0000 to 74.0000 value range since the beginning of September.
The question speculators need to consider is if the recent bullish run is the effect of risk adverse trading starting to dominate forex as the US elections approach. Institutional money does have a habit of getting into positions before others and maybe setting the trend. The unknowns facing the global market place because of the US election is definitely having an effect on global markets.
However the effects of caution coming into forex may be short lived. The US election is a little more than a week away and after the election no matter who the winner it is likely optimism will emerge again. When the tide will turn within emerging market currency pairs which have faced headwinds recently against the USD? The Indian Rupee has certainly seen bullish momentum develop versus the US Dollar the past week, but it does appear to be approaching resistance which may be able to spark a reversal lower.
Speculators may want to use resistance targets near the 73.7800 juncture as a potential stop loss position if they want to sell the USD/INR. Pursuing downward movement may be going against the short term trend, but the Indian Rupee has delivered a capable bearish range mid-term and this track towards the 73.4000 to 73.0000 targets is likely not over yet.
Indian Rupee Short Term Outlook:
Current Resistance: 73.7800
Current Support: 73.6200
High Target: 73.8500
Low Target: 73.5000
