USD/INR: Fundamental Trading Perspective & Technical Clarity

Robert Petrucci

The USD/INR delivered a large amount of volatility late last week, but the Indian rupee remains attractive technically.

 

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After achieving a strong bearish surge lower in the middle of last week, the USD/INR reacted like other major currency pairs and demonstrated a steep reversal higher as the week finished. Yesterday’s trading also experienced another rather eventful amount of turbulence within the USD/INR. The pair opened with a solid movement downwards and was followed by an abrupt climb which touched the 73.4000 mark.

Intriguingly, from a technical perspective, the USD/INR did not break completely out of its short-term range. Yesterday’s highs did not surpass last week’s highest price levels. Today, upon opening with larger volume transactions, the USD/INR has actually developed a downward slope and is trading within sight of the 73.0000 support juncture which it has been able to puncture before.

Traders who pursue short-term positions may have been unsuccessful late last week if they were pursuing the rather strong long-term bearish trend the USD/INR has been displaying. However, traders should understand it is advised that the USD/INR does need a tactical risk management strategy to guard against the danger of volatility. Importantly, late last week’s surge higher likely occurred because of a reaction within financial institutions globally and the move was probably not a sudden sign of change in sentiment in the USD/INR.

The USD/INR is hovering near an important psychological juncture as it traverses near the 73.0000 ratio. The ability of the USD/INR to trade below this juncture has been demonstrated over the past month of trading. The end of February and March has definitely seen violent reversals higher in the USD/INR, but this has happened because of fundament financial moves globally due to reaction in the US government bond market, which are likely short-term gyrations only.

The USD/INR will remain a volatile trading pair if risk-averse trading continues to ignite markets. However, traders have an opportunity to also perceive the technical bearish trend, which still exists within the Forex pair, and contemplate trying to take advantage of the higher ground the USD/INR is charting at this time.

Selling the USD/INR above the 73.0000 level and targeting values below may prove a worthwhile speculative wager. Traders need to remain alert to developing news regarding market sentiment, and this can be judged via the results in global equity indices for clues.

Indian Rupee Short-Term Outlook:

Current Resistance: 73.1900

Current Support: 72.9700

High Target: 73.3200

Low Target: 72.8800

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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