USD/INR: Durable Resistance Sparks Bearish Trading

Robert Petrucci

The USD/INR has seen bearish sentiment creep back into its trading realm the past couple of days as higher resistance levels proved adequate.

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The volatility within the USD/INR has not exactly subsided, but higher resistance levels which were tested the middle of last week have proven adequate. On the 19th of April, the USD/INR was trading near the 74.5600 vicinity, but on the 21st of April, the Forex pair hit a high of nearly 75.7600. While the USD/INR did linger near this upper value for hours, eventually selling pressure crept into the market and the 75.0000 price became vulnerable.

As of this writing, the USD/INR remains under the 75.0000 mark and traders should keep their eyes on this level. The USD/INR appears to have been affected by sentiment being generated via a spate of news covering the strong resurgence of coronavirus within India. However, it is possible that for the moment, the implications of the virus have reached an apex within financial houses regarding their levels of risk-averse trading decisions.

Technically, when a one-month chart is studied, many speculators may consider the recent incremental bullish momentum as having been overbought. Adding fuel potentially to the heart of speculative decisions is that a glance at a three-month chart clearly shows the lower depths of value that the USD/INR was traversing only one month ago. On the 26th of March, the USD/INR was trading near 72.6000.

However, since late in the first week of April, the USD/INR has seen a shift of tides and the Forex pair is still within a definite higher range. The USD/INR is extremely interesting because it offers traders the opportunity to consider lower value technically, but it first must prove that potential higher moves are eroding from a perspective of momentum.  If the support junctures of 74.7300 to 74.6000 begin to appear vulnerable the USD/INR may suddenly see an influx of bearish behavior grow.

Volatility is likely to remain a key ingredient of the USD/INR short term. India remains a focus regarding media coverage of coronavirus and this will have an effect on trading sentiment. However, from a technical viewpoint, the USD/INR continues to look like it remains within a higher value range, which will eventually prove unjustified. Speculators may choose to continue to sell the USD/INR on slight reversals higher while targeting existing support boundaries as take-profit opportunities.

Indian Rupee Short-Term Outlook:

Current Resistance: 75.0400

Current Support: 74.7300

High Target: 75.2100

Low Target: 7.4600

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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