The USD/INR continues to display rather solid bearish momentum in the short term and resistance levels have been durable.
The USD/INR continues to produce downside momentum and is challenging important mid-term support levels within sight of the 73.2000 juncture. After a rather strong bullish trend emerged the third week of March until the around the 21st of April, the USD/INR has certainly developed an significant bearish trajectory as it has gone from highs of nearly 75.5900 to its current low water marks which are testing values not seen since the 6th of April.
Speculators who believe the USD/INR has more room to traverse downwards will want to pay close attention to the 73.1800 to 73.1100 junctures. If these values below begin to look vulnerable, or at the least witness sustained trading within this technical range, the USD/INR may be indicating ability to test a value band which has not been sincerely traded since the last week of March.
Concerns regarding coronavirus in India are certainly still present, but for the time being it appears financial institutions have digested the news and are not trading based on these worries in a significant manner. The USD/INR is now within sight of values which are within shouting distance of its rather strong bearish stance and speculators may believe there is additional territory which can be attained below. Technical maneuvering may be very important at the current price levels.
From a risk reward perspective, traders cannot be faulted for thinking the USD/INR has found too much downside traction and they may suspect a brief reversal will be demonstrated. However, it seems likely that any short term moves higher might run into the rather strong resistance levels which have incrementally decreased since the 21st of April, which was when the greatest fears regarding coronavirus were affecting the trading of the USD/INR.
Speculators who want to pursue further downside price action should be careful. Present support levels do look quite strong and may pose an important psychological hurdle. However, if the price of 73.1800 is punctured lower and the USD/INR shows it has the capability to maintain this value without any wild reversals higher, the forex pair may be ready to produce another leg lower and test values which could prove to be worthwhile for traders who continue to believe in bearish momentum.
Indian Rupee Short Term Outlook:
Current Resistance: 73.3100
Current Support: 73.1600
High Target: 73.4200
Low Target: 73.0100