The USD/INR is testing its short-term range as support continues to be targeted and is looking potentially vulnerable technically.
The USD/INR has made another move downwards early this morning, but has reversed slightly higher as of this writing. The short-term range of the USD/INR continues to underscore the perspective that support levels appear vulnerable technically. The current price of USD/INR is hovering within an important value band. Certainly, lower ratios may be the target of speculators, but they should also monitor the cyclical reversals higher to see if resistance levels are being maintained.
The USD/INR has incrementally been able to lower its resistance levels on a consistent basis since the beginning of March. Experienced traders know, however, that one-way tracks do not often in exist in the world of Forex. If a trader insists on only pursuing the bearish trend of the USD/INR they cannot be faulted, but they must also understand that using capable stop losses slightly above perceived resistance levels could prove to be a secure line of defense.
The USD/INR is hovering above important support levels which are attractively close. The 72.4800 level looks to be a rather interesting focus, and if this ratio should falter and bearish momentum builds power, the 72.3800 target could become an alluring juncture for sellers of the USD/INR. However, traders should know that lower values were tested in late February and touched the 72.3000 mark, which then ignited a strong reversal higher which promptly came close to touching 74.0000 all within a couple of days.
Speculators who pay attention to fundamentals besides technical charts may point out that the price action of the USD/INR may have been different in late February. This is because the sudden rocket higher by the USD/INR may have been a reaction to a momentary change in sentiment when global financial houses became risk-averse as the US stimulus package was being voted on and its impact on US bonds caused the market to stir.
Selling the USD/INR may feel rather unsafe as it tracks near its important short-term support levels. Some traders may suspect reversals higher will be the proper calling card. However, buying the USD/INR and looking for runs higher can be perceived as going against the existing trend. Selling the USD/INR remains perhaps a more pragmatic opportunity for patient traders who short the Forex pair on small reversals higher while aiming for profitable trades as they target support levels.
Indian Rupee Short-Term Outlook:
Current Resistance: 72.6100
Current Support: 72.4800
High Target: 72.7100
Low Target: 72.3800