The USD/INR has seen its short-term support and resistance levels grow tighter the past couple of days. The Indian rupee has managed to sustain its lower values certainly, but the sudden tight range within the USD/INR may be causing anxiety among some traders of the Forex pair who are unaccustomed to consolidation.
Global markets remain robust and optimistic, which has fueled many equity indices higher. The USD has also seen some erosion of value against a wide variety of currencies. The Indian rupee has been able to maintain its bearish stance, but the past five days have also seen support levels prove adequate. Speculators may be growing uneasy as the USD/INR traverses levels slightly below the 73.000 juncture without being able to generate more momentum downward.
However, traders should remain patient and use the consolidation as an opportunity to use tight stop losses and pursue their positions while taking advantage of short-term technical charts. Sentiment remains bearish within the USD/INR until proven otherwise. Support levels below may appear adequate, but the ability of the Forex pair to sustain its value below the 73.000 and not produce wild reversals higher should be embraced by speculators who share the notion that the USD/INR has the capability of demonstrating more downside.
While support levels have actually increased the past couple of days within the USD/INR, traders can target the nearby ratios and use take-profit orders for quick-hitting positions. Using limit orders is important within the current consolidation because a market order with no specific price target could be tagged with a fill that is unwelcome. If a trader places limit orders slightly above current values on small reversals higher and activates a selling position aiming for the 72.870 juncture as a profit target, this may prove worthwhile.
Short-term support continues to look vulnerable and, if the 72.870 mark collapses, and the 72.810 juncture is tested, then the recent consolidation within the USD/INR may begin to fade and a legitimate bearish movement could ensue. Certainly, there is a chance reversals higher can take place too; traders must practice their risk management correctly in order to protect against the potential of the USD/INR suddenly becoming volatile again.
Indian Rupee Short-Term Outlook:
- Current Resistance: 72.980
- Current Support: 72.870
- High Target: 73.060
- Low Target: 72.810
