USD/INR Forecast: May 2021

Robert Petrucci

The USD/INR provided traded with fierce complications in April as coronavirus implications took their toll on the forex pair and caused bullish momentum to be strong.

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As the month of May is set to begin, traders of the USD/INR will certainly be hoping for better speculative conditions. On the 1st of April the USD/INR was trading near the 73.1600 juncture and had experienced a rather choppy month of value in March. Technical charts of one month and three months demonstrate the rise and falls which were seen in the USD/INR clearly.

The past two months of trading for the USD/INR have been effected by shifts in sentiment due to US stimulus policy and a surge of coronavirus within India.  However as May begins traders have the ability to look forward to potentially more tranquil days.

The USD/INR is trading near an important technical juncture. The 74.0000 value should be watched closely as it is traversed. Since reaching a high of 75.5600 on the 21st of April the USD/INR has incrementally found the ability to create a bearish trend. The Indian Rupee is still within the higher range of its value when looking at a three month chart and the question is if and when behavioral sentiment will begin to turn optimistic.

If optimistic sentiment begins to create a change in attitudes, the USD/INR is technically in a position which may demonstrate the ability for a rather intriguing reversal lower with the forex pair. Traders should be cautious and keep their eyes on the current price level of the USD/INR. If the 74.0000 mark does start to see sustained trading below, sellers may believe the forex pair has the capability of recapturing its long term bearish sentiment.

The past two months of trading have not been easy for speculators who favor bearish positions.  In order to pursue selling positions, traders should certainly protect their positions with stop losses. However from a risk reward trading perspective the greatest amount of ground may prove to be downside momentum which appears to have rather vulnerable support levels below.

Speculators cannot be faulted for looking for more reversals higher short term. The current news flow from India regarding coronavirus is certainly worth considering, but traders should understand the possibility that a lot of the ‘fearful’ price action from buying momentum may have already taken place and that calmer trading conditions may be seen in the coming weeks. Technically the USD/INR looks like it remains overbought and has further room to traverse downwards during the month of May.

USD/INR Outlook for May:

Speculative price range for USD/INR is 73.0500 to 75.4500.

Support near 73.7500 appears to be crucial. The last time this juncture was traded was at the end of the first week in April. If this value is challenged and falters it could set the table for fierce momentum and a re-examination of current sentiment within the USD/INR. If a bearish trend can build the 73.5900 mark should be watched. Sustained trading below the 73.5000 value could certainly create a test which begins to aim for the 73.2000 juncture which was last traded on the 1st of April.

Price action near 74.0000 could prove to be instrumental from a psychological perspective for technical traders. If the value of the USD/INR is not able to sustain its values below this level and the 74.2000 if flirted with and broken higher it could signal more bullish activity is ahead. The 74.3000 to 74.5800 junctures could become a strong testing ground if the USD/INR continues to be peppered with buyers. If this level happens to prove vulnerable than it is conceivable the higher range of the USD/INR which was exhibited the 8th until the 28th of April could become a battleground again.

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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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