USD/INR: Consolidation Collapses as Bearish Pressure Mounts

Robert Petrucci

The USD/INR has broken free from consolidation experienced last week and has seen strong bearish momentum early today.

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The USD/INR broken through critical long-term support this morning and has seen its bearish trend grow in strength. The USD/INR is now challenging values it has not sincerely traded since March of 2020. Technical traders may begin to feel nervous within these lower depths, but the ability of the USD/INR to consolidate last week and not seriously challenge higher resistance levels proved to be a solid short-term indicator.

Traders who have been pursuing the bearish trend of the USD/INR were hopefully rewarded this morning. Speculators may ask if the move in the Forex pair was too strong and if a natural reversal upwards will now be exhibited. Caution is always a good characteristic when trading, but if a speculator is tempted to look for upside momentum they should have short-term goals in mind, which means they should have take-profit orders working within the current price range.

Global markets remain rather solid regarding risk appetite and if optimism continues to be a dominant feature, then traders of the USD/INR may be justified in targeting values below. The bearish trend of the USD/INR may continue, and although a potential reversal higher should be expected, the momentum of the Forex pair clearly signals that more downside action can be pursued with logic.

Support at 72.530 may look far away and traders would be correct not to target this value quite yet while selling USD/INR. However, the current range of the Forex pair is within a price band which has experienced little trading the past eleven months, and there is a vacuum of technical data within the current value the USD/INR is moving this morning. Yes, if the Forex pair moves up it will be within a known range, but additional bearish action would mean that the USD/INR will be challenging values, which may cause further volatility.

Short-term traders who choose to continue to look for downside momentum should not be greedy. Speculators should target nearby values below for quick-hitting trades testing the 72.580 to 72.560 junctures. If those bearish targets prove vulnerable, more downside pressure could rapidly develop until gaps in long-term technical charts are ‘filled’ in and equilibrium is found via institutional trading, which may have their programmed software systems prepared for February 2020 values to be tested.

Indian Rupee Short-Term Outlook:

Current Resistance: 72.700

Current Support: 72.530

High Target: 72.790

Low Target: 72.340

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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