USD/INR: Bearish Momentum has Reignited and Testing Support

Robert Petrucci

The past day-and-a-half has seen bearish momentum come back into force for the USD/INR and important support levels are being tested.

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Market conditions have been fast for the USD/INR in early trading this morning. The Forex pair has reestablished is bearish trend and is hovering above key support levels. Traders may be skeptical that the USD/INR can recapture all of its lower values within only a day-and-a-half of downward momentum, but the Indian rupee is certainly within shouting distance of important low water marks.

Speculators who were taken by surprise by the USD/INR’s sudden bullish run higher last week are now likely questioning if the bearish momentum can be sustained. The USD/INR has enjoyed a solid downward slope since mid-November with occasional reversals proving difficult for traders. However, traders using conservative leverage and patience have likely been rewarded.

One point which should be contemplated is that Forex trading can often provide bewildering results in early January. This happens frequently, because financial institutions which were absent from trading during the holiday season suddenly emerge from their slumbers and make large transactions which were missing from the markets for two weeks, causing imbalances.

The ability of the USD/INR to create a solid move downwards should not come as a complete surprise to speculators. The question traders now need to answer is how to pursue the current value of the Forex pair. While some speculators may want to wager on a reversal higher to develop, it might be more logical to simply pursue selling positions and use selected resistance levels as stop loss protection if volatility develops to the upside.

The support level of 73.070 may look rather far away for some traders, but this morning’s price action has been quick and the 73.110 mark has already endured a test. If the USD/INR can sustain its value near term within its current price vicinity and hold onto to the recaptured bearish territory it finds itself within, this could be a signal that additional downside potential exists.

Selling the USD/INR with limit orders appears to be the logical decision for short-term speculators. Perhaps waiting for an anticipated reversal upwards and selling within the 73.200 to 73.240 levels may prove worthwhile for traders. The USD/INR has been fast this morning, and the Forex pair is likely to continue to produce short-term sparks.

Indian Rupee Short-Term Outlook:

  • Current Resistance: 73.260
  • Current Support: 73.070
  • High Target: 73.410
  • Low Target: 72.940

USD/INR chart

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.

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