The USD/INR is testing long-term resistance levels as concerns regarding a resurgence of coronavirus in India have spooked traders.
In early trading this morning, the USD/INR has remained volatile, and again is displaying bullish sentiment. The USD/INR is approaching important long-term resistance levels last tested in early July of 2020. The 75.5000 juncture is acting as a magnet and may become a rather enticing inflection zone for speculators testing their sentiment.
Until the middle of March, the USD/INR had been demonstrating a strong bearish stance, which saw the Forex pair trading near the 72.3000 area. However, in the past month, the USD/INR has risen in value. Technically, there is no denying that since late in the first week of April, the Indian rupee has staggered and its weakness has magnified. India has acknowledged the potential economic effects on its economic outlook as a resurgence of coronavirus hits the nation.
Speculating on the USD/INR will likely remain volatile in the short term. If the USD/INR continues to climb higher, it could soon be testing values seen in June of last year. At the height of coronavirus concerns in April of 2020, the USD/INR was trading above the 76.5000 level the second week of the month.
The question is how much higher the USD/INR can go with a lack of confidence regarding the current economic implications in India. Speculators who are optimistic that there will be a change in sentiment may be proven to be correct, but predicting the timeframe becomes the challenge. Traders who are tempted to sell the USD/INR because it is trading near highs are urged to use stop losses to protect their positions from losing control. The downside may look attractive, but it could prove dangerous.
While the upside may not have much further room to wander, in the short term, being a buyer of the USD/INR may prove to be the correct speculative wager. Traders should expect a large dose of volatility to remain within the USD/INR. Yes, the USD/INR appears to have gained almost too much value in Forex, but technically, the currency pair may have further room to traverse higher short term. Speculators need to use their risk management skills when trading the USD/INR and monitor the Forex pair’s results carefully.
Indian Rupee Short-Term Outlook:
Current Resistance: 75.6500
Current Support: 75.2400
High Target: 76.0300
Low Target: 75.0200