USD/INR: Short-Term Range Challenged by Reversal Higher

Robert Petrucci

The USD/INR produced a relatively strong reversal higher yesterday after traversing the lower realms of its bearish value range.

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Spurts of volatility have been exhibited within the USD/INR the past day as the Forex pair challenged important support yesterday, but then began to experience incremental reversals higher. Upon opening this morning, the USD/INR also saw a climb higher and the 72.950 mark was touched, but since hitting this mark, the Forex pair has declined slightly.

Yesterday’s trading is intriguing technically, because the USD/INR was unable to break through support levels it traversed late last week and this Monday. Speculators should not be too surprised by the failure to puncture support levels lower. The mid-term speed of the bearish move of the USD/INR has been rapid and its trajectory was not likely going to maintain an accelerated pace downward.

Consolidation within the current price range of the USD/INR should be monitored closely. If the Indian rupee is able to sustain its value below the 73.000 juncture and incrementally lower its resistance levels near term, this will continue to indicate the likelihood for further bearish momentum to ensue. However, the current price vicinity of the USD/INR may permit speculators an opportunity to test the waters in both trading directions as the Forex pair percolates.

Traders looking for quick-hitting positions may enjoy the current range of the USD/INR and use support and resistance levels as take-profit ratios with the belief that the Forex pair may provide choppy conditions short term. If the USD/INR breaks above the 73.030 level, it may have the ability to test higher marks short term, but traders should not expect a whirlwind of upward momentum. However, if the USD/INR does break the 72.930 support level below and then challenges the 72.800 target, it is conceivable that the Forex pair may be reestablishing its bearish trend sooner rather than later.

From a risk/reward perspective, selling the USD/INR continues to look like the proper speculative wager, particularly at its current price vicinity when upside potential may be sparse. However, the USD/INR does have a long track record of producing sudden jolts of volatility. This may allow speculators the ability to make quick trades to test both sides of the coin. Limit order positions which seek nearby value targets based on support and resistance levels, and which can be focused on as an opportunity to sell high and buy low with fast trades in mind, may be the best tactic short term.

Indian Rupee Short-Term Outlook:

Current Resistance: 72.930

Current Support: 72.780

High Target: 73.030

Low Target: 72.640

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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