The USD/INR continues to explore lower support levels incrementally and its bearish trend is showing signs of building momentum. Yes, yesterday’s trading also produced some reversals higher for the USD/INR, and resistance levels may actually entice short-term speculators who believe that until support is completely fractured, small reversals higher are a good wager.
However, if a speculator is betting on reversals higher from current support levels as a natural reaction within Forex, traders should also take a glimpse at long-term charts to gather their short-term perspective. If the USD/INR continues to test support levels and does penetrate lower values, there may come a time when the moves lower could pick up industrial strength speed, meaning a breakout may occur.
Pre-coronavirus values of the USD/INR clearly show that the Indian rupee was trading at stronger values against the USD. As a guidepost, traders should note that the USD/INR was actually trading around 70.630 in early December 2019. In the middle of February of last year, the USD/INR was valued near 71.900. These two values, when glanced via a long-term chart, should serve as a potential clue that the USD/INR does have the capability to continue its bearish trend.
It should be remembered that the USD/INR is a volatile Forex pair and can deliver swift and painful spikes, which can ruin a speculators day if risk management has not been used. However, traders with the desire for risk-taking may also find technical long-term contemplation enticing. If a trader doesn’t want to wager on a breakout of the USD/INR lower and insists on looking for small bounces upwards, it cannot be faulted. However, risk/reward should be considered too.
The question is where the greatest amount of movement will occur for the USD/INR. In the short term, small bounces upwards do seem like they will continue to produce small tests of resistance, but if the current support junctures do prove vulnerable, the USD/INR may produce a rather fast move downward.
Selling the USD/INR is a dynamic speculative wager if current consolidation near support crumbles. Traders who want to short the USD/INR are encouraged to use limit orders and choose their stop losses wisely. The USD/INR is within an intriguing value range currently and, if the bearish trend doesn’t relent, a move downwards from current values could become fast.
Indian Rupee Short-Term Outlook:
- Current Resistance: 72.960
- Current Support: 72.810
- High Target: 73.120
- Low Target: 72.650
