The USD/INR has produced another leg upwards, which has the Forex pair challenging resistance levels seen almost two weeks ago.
The USD/INR has broken through important short-term psychological barriers higher the past handful of days, and is traversing intriguing resistance not seen since the 20th of May. The move higher will challenge speculative perceptions, and traders who have been actively pursuing bearish momentum have likely been hurt if they have not used proper risk management.
The upwards mobility of the USD/INR has been stronger than expected, but the Forex pair certainly remains within a bearish technical mode when long-term consideration is given. The question now for short-term speculators is where direction will unfold over the next couple of days. Having taken a beaten trying to pursue the downside of the USD/INR has likely raised doubts among bearish speculators. But if they have been using stop-losses while engaging in their risk-taking endeavors, they may still want to consider the potential of a downside move occurring.
The ability of the USD/INR to produce this rather strong move higher must be given respect, and the move needs to be accepted as part of the working environment. As of this writing, the USD/INR is trading slightly below the 73.1000 level and, if values can be sustained beneath this juncture, traders may believe that the 73.0000 target will be aimed for sooner rather than later.
The USD/INR has certainly packed a punch for traders who have been on the wrong side of the trading terrain the past couple of days. However, cyclical reversals higher and lower are part of the natural landscape within Forex and experienced traders understand that this means that the use of limit orders, take-profits and stop-losses are necessities. Short-term traders need to know they should not stay married to a position. When the market is going against them, it is often best to abandon a trade and not let it eat all of the cash in an account just because of stubbornness.
The USD/INR does look technically overbought at its current levels. The recent moves higher by the Forex pair can be viewed as a strong reaction to the significant amount of bearish momentum the USD/INR has demonstrated since late April. This three-day bullish move may prove to be short-lived. Speculators who have the endurance and ability to use proper trading techniques may want to sell the USD/INR short term as a wager.
Indian Rupee Short-Term Outlook:
Current Resistance: 73.2500
Current Support: 72.9850
High Target: 73.3590
Low Target: 72.6500