The USD/INR has proven to be rather intriguing during the month of March as it trades in a manner not quite correlated to other currency pairs.
The USD/INR continues to trade with an ability to communicate that it is within a strong bearish trend. Although the USD/INR certainly saw a small bullish trend emerge at the end of February, this occurred after important low water marks were touched near the 72.2000 level on the 24th of the month. The short-term bullish trend which emerged was potentially related to sentiment being generated in global markets, but the USD/INR has also demonstrated the capability to not dance in step with other currency pairs.
Since reaching a high of approximately 74.0000 on the 26th of February, the USD/INR has incrementally been proving that support levels are vulnerable and has resumed its bearish trend with vigor. Yes, the USD/INR has seen upward movement the past week of trading as global sentiment proved risk-averse, but the moves higher were not as volatile as many other Forex pairs. Importantly, on the 9th of March, the USD/INR was also able to puncture the 73.0000 mark lower.
Intriguingly, for speculators who continue to have bearish sentiment regarding the USD/INR, the 73.0000 mark has seen sustained trading below this value the past two days. While this price action has taken place, the USD/INR has also shown an ability to challenge mid-term support levels and prove they are still vulnerable. As of this writing, the USD/INR is trading near a key support juncture which, if broken lower, could produce more speculative selling.
The support junctures of 72.6000 to 72.4800 should be watched closely by traders. Speculators who believe further downside pressure will continue to be produced may want to be sellers on slight reversals higher and aim for this juncture with their take-profit orders working so they can capitalize. Traders may also be focused on targets below this juncture, but that might prove to be too greedy a goal for short-term endeavors. However, if the 72.5000 level does begin to see a test some speculative forces may believe the 72.4000 mark will be targeted.
The USD/INR can deliver plenty of volatility, but the past two weeks have proven that the Indian rupee has the capability of being technically efficient and its bearish momentum remains attractive. The current price range of the USD/INR may be capable of producing additional bearish speculative wagers which could be worthwhile for traders who use tactical limit orders properly.
Indian Rupee Short-Term Outlook:
Current Resistance: 72.7900
Current Support: 72.5600
High Target: 72.9600
Low Target: 72.4000