The USD/INR has become a speculative playground the past few days of trading and this morning has been no different. The Indian rupee, as of this writing, is near important resistance and this may intrigue traders who have enough emotional fortitude to withstand the rollercoaster-like movements of the USD/INR. Psychological support certainly lingers above near the 74.000 juncture, but only a few days ago the USD/INR challenged the 74.100 mark.
The value of the USD/INR from a technical viewpoint looks like it is high, particularly when it is correlated with other emerging market currency pairs. However, the dynamics within the USD/INR have been fast and furious, and even as the Forex pair has seemingly won a battle to reestablish its lower price band and prove bearish sentiment remains a force, moves like the ones seen the past few days quickly reaffirm that volatility is present.
This sets the table nicely for traders who feel particularly speculative and want to wager on the USD/INR before going into the weekend. Global risk appetite has been abundant - even exaggerated - the past week as equity indices have reached for highs, but short-term sentiment could be jolted if caution emerges short term.
The USD/INR has proven it has the ability to produce reversals in a breathtaking fashion and spikes have been witnessed. Speculators who believe the Indian rupee has the capability to traverse lower and again challenge support levels below need to be braced for the possibility that the USD/INR could produce additional moves higher short term. An important factor for trading the USD/INR the next two days will be to have risk-taking parameters set according to the current market conditions which have proven fast. Leverage should be used wisely so any unforeseen moves do not cause havoc within trading accounts.
Traders who have the stomach to sell into the current conditions of the USD/INR and use resistance levels as stop loss orders may find favorable results, but speculators will have to be nimble and be able to get out of positions effectively if they want to trade quickly. Short term, the USD/INR may be set for further choppy conditions and for reversals to remain prevalent. Looking for downside movement at these higher levels within the USD/INR may prove effective, but patient trading will need to be practiced.
Indian Rupee Short-Term Outlook:
- Current Resistance: 73.980
- Current Support: 73.660
- High Target: 74.100
- Low Target: 73.410
