USD/INR: New Year, New Week, New Support Levels for Rupee

Robert Petrucci

The USD/INR opened trading today with another swift attack on support targets below and is creating a speculative playground.

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The USD/INR hit new short-term lows early today as its bearish trend refuses to vanish. As trading begins this week, speculators need to understand that volumes will remain lackluster as financial institutions wake up from their holiday slumbers around the world. However, the lower values seen this morning near 72.730 are a stark reminder that the USD/INR has demonstrated strong downward momentum recently and continues to make support levels look worthwhile.

After the USD/INR’s thrust downwards, a reversal has taken place and the Forex pair is now traversing near the 73.000 level, which may continue to be battled near term. While the additional bearish firepower of the USD/INR has been considerable, the USD/INR’s move upwards after targeting long-term support levels should be looked at as a natural short-term cycle. Some analysts may believe that the Indian rupee may need a couple of days this week for full volumes via commercial enterprises to return the USD/INR to a balanced equilibrium.

However, the USD/INR typically does possess a rather abundant amount of volatility. Swift moves and reversals are not uncommon with the Indian rupee. Speculators who are in the risk-taking business may believe that the bearish momentum of the USD/INR is not going to disappear, and more opportunities exist by continuing to pursue support levels with managed positions using appropriate stop loss ratios.

This morning’s early move lower, which tested support near the 72.730 level, is highlighting values in the USD/INR not fully seen since early March of 2020. Technical traders should look at long-term charts and contemplate the potential of further downside price action occurring within the USD/INR and understand that new support targets may come into focus sooner rather than later. Yes, there are lighter than normal trading volumes in Forex currently, but the USD/INR’s bearish trend has been solid and could continue.

Reversals higher will certainly occur occasionally, and speculators who want to take advantage of quick, cyclical, technical moves higher cannot be faulted. However, traders should consider risk /eward scenarios and ask where the greatest likelihood of movement will be exhibited near term. Continuing to pursue selling positions of the USD/INR remains an attractive speculative trade after many support levels have proven vulnerable.

Indian Rupee Short-Term Outlook:

  • Current Resistance: 73.080
  • Current Support: 72.860
  • High Target: 73.190
  • Low Target: 72.750

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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