USD/INR: Bearish Momentum Approaching Key Support Junctures

Robert Petrucci

The USD/INR continues to produce bearish momentum in the short term as it reverses from highs made one week ago.

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In early trading this morning, the USD/INR has displayed more bearish momentum, and the Forex pair is now on the cusp of important support junctures. As of this writing, the USD/INR is hovering near the 74.4500 mark and key values below within the 74.3900 to 74.3500 junctures are tantalizingly close. On the 16th of April, the USD/INR traded near 74.2600.

In order to build on bearish sentiment, the USD/INR will have to sustain values below the 74.5000 mark. Volatility the past few weeks within the USD/INR has been prominent as India has faced a surge of coronavirus, which has spooked financial institutions. On the 30th of March, the USD/INR was trading near the 72.7800 vicinity, which highlights the magnitude of the spikes higher which were demonstrated in April.

Technically, the USD/INR is hovering on the lower tier of its upper value range. However, there is still room within this higher band which exists below, meaning that even if the USD/INR falls to a level near 74.3000, bullish speculators may believe that reversals higher may still ensue. Speculators who want to continue looking for downside price action with selling orders may have the luxury of rather close resistance levels which can be used as indicators. Having produced further selling early this morning, the USD/INR may become choppy within its current price vicinity as traders come to grips with direction.

The USD/INR is certainly being affected by behavioral sentiment as much as technical perceptions the past couple of days. While coverage of the coronavirus statistics in India has been widespread, the hope that the nation will soon begin to manage the crisis more effectively has likely caused some financial institutions to have a more optimistic attitude. The belief that India will find a way through the current wave of coronavirus may be creating a more bearish technical attitude regarding the USD/INR.

As the USD/INR hovers above its important support levels, traders may want to acknowledge that the Forex pair has been able to penetrate other short-term barriers as it has moved lower.  Speculators should not anticipate huge moves from the USD/INR, and they should cash in winning positions if they develop, or at a minimum use a trailing stop to lock in some profits. Reversals higher will certainly take place, but resistance levels may be incrementally decreasing, which could attract more bearish trading.

Indian Rupee Short-Term Outlook:

Current Resistance: 74.5100

Current Support: 74.3400

High Target: 74.8300

Low Target: 7.1800

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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