The USD/INR is traversing important support levels and has proven that downward momentum has the capability of re-establishing its bearish trend. As of this writing, the Forex pair is hovering above the 73.300 support juncture, and if the USD/INR is able to penetrate below this level, it could create additional speculative fever among traders. The Indian rupee has traded at lower values against the USD the past six months and has suffered higher reversals both times. Traders may be wondering if the third attempt downward will be the charm.
The question which first must be answered is if the USD/INR has enough bearish power to trade within lower values and can actually sustain its value below. The holiday season is still a concern within Forex because of the absence of large transactional volumes, but the USD/INR has certainly displayed an incremental downward trend and resistance levels have proven to be reliable short term as values to seek reversals.
Traders should watch the 73.300 level carefully. If this support level is broken lower and the USD/INR can trade comfortably within the 73.290 to 73.240 value band for a sustained duration, this may be a signal that technically the Forex pair can traverse to new lows. Sudden volatility is always possible within the USD/INR and traders should not get lazy regarding their risk management.
Global risk appetite is proving it has teeth early this week, and if major equity indices continue to achieve record highs, it may create another wave for the USD/INR to trade lower. The current price of the Forex pair is near important support levels tested a few times during the month of December. What speculators should be on the lookout for technically is a retest of October values where values below the 73.300 mark were sustained.
Selling the USD/INR remains an attractive speculative wager. Traders should use nearby resistance as stop loss ratios while looking for lower ground. The bearish trend within the Forex pair appears to be a logical wager, but speculators will have to remember that the absence of large institutional traders may create sudden spurts of volatility which can cause spikes. However, if global markets remain optimistic near term, there is reason to suspect that the USD/INR may benefit and challenge technical support levels which do look vulnerable.
Indian Rupee Short-Term Outlook:
- Current Resistance: 73.460
- Current Support: 73.240
- High Target: 73.590
- Low Target: 73.140
