The USD/PKR continues to burst through vulnerable support levels, even as most global trading has taken on a rather nervous attitude. Speculators within the USD/PKR are accustomed to being risk takers and the price action of the forex pair has produced a solid bearish trend since the 1st of October. The question traders may want to ask is when the selling momentum will come to an end and a bullish trend will reignite.
However, it must be pointed out that the USD/PKR has been swimming against the nervous tide of sentiment which has engulfed most trading landscapes this month. While many emerging market currencies have faced headwinds recently due to risk adverse behavior developing in forex, the Pakistani Rupee has produced a significant bearish trend which has allowed speculators to take advantage.
Support for the USD/PKR now appears to be the 159.9500 level; this juncture was last traded in late May. If the USD/PKR continues to challenge support levels and puncture them lower, speculators may be inclined to believe the forex pair could produce further downward momentum. The question is if the Pakistani Rupee can continue to produce sellers within the USD/PKR ,even as it trades literally in an opposite direction compared to many other global assets.
The Pakistani Rupee doesn’t enjoy a world of good will from investors and its transparency is not easy to discern. However as the USD/PKR continues to make support levels appear vulnerable, speculators with a taste for risk taking may want to simply continue to pursue its downward trend. Volatility has been a hallmark of the Pakistani Rupee and although its solid bearish trend downward this month has been polite, traders need to understand unexplained spikes are always a possibility.
If a speculator is tempted to sell the USD/PKR they cannot be faulted, but they should contemplate the results of trading within the Pakistani Rupee almost seem to be happening in a vacuum which should raise the suspicion momentum could shift at any time. Traders must use limit orders to protect their price fills when opening positions and they certainly need to have stop losses in place. It is also worth noting that speculators should not become too greedy and they should practice the art of cashing in winnings if they have profitable results.
Pakistani Rupee Short Term Outlook:
Current Resistance: 161.1200
Current Support: 159.9500
High Target: 161.7700
Low Target: 159.2300
