USD/PKR: Consolidated Range Indicates a Possible Breakout

The USD/PKR has sustained a tight range this week after producing bearish momentum; speculators should be intrigued about what is going to happen next.

The USD/PKR has been able to trade in a tight range the past two days and has maintained lower values after experiencing bearish momentum. Since the beginning of October the forex pair has shown a remarkable ability to traverse lower and incrementally decrease its technical resistance. The past few days of trading with rather consolidated values indicates another wave of momentum may be ready to unfold.

The USD/PKR does not have a significant amount of trading volume and because of this it is susceptible to rapid price surges.  Experienced traders likely know the Pakistani Rupee has lost a considerable amount of value technically against the USD. However, while the USD/PKR created high values from mid-June until the end of September, it also built a very strong and frequently adequate support level near the 165.5000 juncture.

What needs to be looked at now is the fact that the mid-June to late September support level has been wiped out.  And the value of the USD/PKR is now standing on the threshold of a new potential range which was practiced from late May until the second week of June. During this duration the USD/PKR traded within a value range of 160.700 to approximately 164.2000.

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As of this morning the USD/PKR is trading near the 163.7000 juncture. The past few days of trading have produced a tight range with no real spikes higher which would indicate the forex pair is about to reestablish its battle with resistance levels up above. In fact from a technical standpoint, the perception can be found that the sustained trading the past couple of days indicates more bearish sentiment will creep into the USD/PKR.

Selling the USD/PKR within its current price range looks like the tempting speculative position. Global risk appetite has proven to be mixed the past few days, but interestingly the USD/PKR has not suffered a bullish run higher because of nervousness in the global marketplace. This may be yet another sign that there is an opportunity to pursue a selling position of the USD/PKR.

Traders should use limit orders with the Pakistani Rupee to insure they are given a proper market entry price which has not been ruined by a sudden and unexpected gyration. If a speculator can sell the USD/PKR it may prove to be a worthwhile opportunity near term.

Pakistani Rupee Short Term Outlook:

Current Resistance: 164.2000

Current Support: 163.3000

High Target: 164.5000

Low Target: 163.0000

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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.