USD/INR: As Lows Get Tested, Volatility and Opportunity Grow

Robert Petrucci

The USD/INR is challenging long-term support levels, but as lows get tested, volatility has increased with swift and frequent reversals.

 

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The USD/INR is has touched support levels it has not legitimately traded since the second week of February 2020. However, as USD/INR has come within sight of its lower bearish values, the Forex pair has also rapidly produced swift reversals higher which have probably caused a test of emotions for speculators who are pursuing the downward momentum.

Even as technical support levels have incrementally lowered because of the barrage of bearish momentum demonstrated within the USD/INR,  resistance levels have also increased incrementally the past two days of trading. A look at a one-day chart offers the conclusion the rush to lows and highs, while exhibiting surges and reversals has actually developed when volumes have been light within the USD/INR.

Trying to decipher why short-term lows and highs have occurred when trading volume has been absent leads to the conclusion the USD/INR is within a value range which is speculative even in the minds of financial institutions. Programmed trading via big trading houses which have a stake in the Indian rupee are probably watching the bearish momentum which has turned into a solid trend and wondering if they need to recalibrate their technical perspectives.

While lows were hit this morning on spikes downward testing the 72.3000 price, the reversals higher were quick and devastating for the unprepared. After this morning’s early trading, it should be obvious to the casual speculator that take profit and stop loss orders need to be working at all times when trading the USD/INR.

The ability of the Forex pair to move from its long-term lows to nearly a height of 72.6000 points out the volatility which can be generated; however, the capability to produce lightning-fast changes in direction also offers speculators an opportunity to take advantage of jumps higher in order to seek low water marks again.

Until proven otherwise, speculators may want to continue to pursue the bearish momentum of the USD/INR. The direction of the Forex pair continues to test lows and traders who are cautious may believe that selling the USD/INR as it moves slightly higher and comes within sight of technical resistance levels will find a chance to seek the potential of more downward price action short term.

Indian Rupee Short-Term Outlook:

Current Resistance: 72.6600

Current Support: 72.3900

High Target: 72.7800

Low Target: 72.2100

USD/INR

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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