USD/INR: Speculators Need Long-Term Glimpse for Perspective

Robert Petrucci

The USD/INR is consistently rattling up against support and occasionally puncturing lower as bearish momentum builds.

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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

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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