Although the USD/INR continues to deliver consistent volatility which tests the emotional fortitude of traders, the trend of the forex pair has been bearish.
The USD/INR appears ready to enter the month of February with its bearish trend intact. However, writing that sentence actually takes courage because of the sudden moves the USD/INR has been able to display since August of 2020, which has frequently tested the conviction of speculators perceptions. Speculators though want insights regarding the future direction of the USD/INR, and the evidence shows the forex pair has trended towards lower values in January via a one month chart.
The problem with perception is that it depends on mindset and timeframes. On the 18th of June the USD/INR was trading near 76.2200 and on the 31st of August the forex pair was trading a hair below the 73.0000 mark. What makes this intriguing and scary is the notion that as of this writing the USD/INR is also trading very close to the 73.0000 level. Which means between the end of August 2020 and towards the end of this January the USD/INR has not moved, except it has and it has done this often in a dramatic manner particularly if a large amount of trading leverage has been used.
In early and mid-November the USD/INR traded near the 74.6700 mark and then began to incrementally trade lower with periodic cyclical reversals higher. Essentially since mid-November until this writing the USD/INR has been within a rather intriguing bearish trend, while suffering from periodic bursts of volatility, spikes and fast upward reversals which were than met by resistance which until now has proven adequate.
What makes the USD/INR even more intriguing to speculators is that in March of 2020 the forex pair begun to suffer from a bullish trend as the implications of coronavirus began to have an effect in forex, but the exciting part of the equation is the fact the Indian Rupee was trading within its current depths. If a speculator takes a look at a one year chart they will see that the USD/INR was trading near 72.6000 on the 2nd of March 2020. The long road back to pre-coronavirus equilibrium has not been accomplished yet, but speculators may be targeting further bearish momentum based on long term technical.
The USD/INR has the ability to move very fast and should be traded by speculators who know how to use limit orders properly. The USD/INR certainly has a tendency for sudden and strong reversals higher which seem to develop with no reason. However, the long term trend taking into consideration all of the cyclical reversals higher since late April of 2020 is bearish. Yet there is a definite problem regarding current support levels which have proved adequate in August and October of 2020, and so far in January of this year around the forex pair’s current value.
Traders may be inclined to suspect February could prove the month where the USD/INR demonstrates an ability to break below what has proven to be consistent support close to its current values. Speculators who want to wager on more downside action and use resistance up above as stop loss ratios cannot be blamed. If and when the USD/INR does break the support levels it is hovering above currently, the pace of trading can be expected to be swift and it is advised traders have working limit orders to protect their profits and guard against unexpected reversals.
USD/INR Outlook for February:
Speculative price range for USD/INR is 72.5800 to 73.7600.
Support at 72.8600 has proven tough late December and late January, if this level proves vulnerable and prices drive lower, the junctures of 72.7700 to 72.7100 should be watched carefully. If these marks are penetrated and sustained a sizeable and rapid test of values could develop below.
Resistance at 73.25 has proven vulnerable numerous times. If this juncture is penetrated higher the range of resistance for the USD/INR could be 73.3500 to 73.5900, if the higher resistance fails the 73.7600 mark could be targeted.