USD/INR: Pursuit of Downward Momentum Grows More Attractive

Robert Petrucci

The USD/INR may prove attractive to speculators who believe the Forex pair may be ready to re-establish some bearing traction.

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The past month of trading for bearish speculators has likely not been easy in the USD/INR. However, the high of nearly 74.8500 reached on the 8th of July may entice traders who have seen a reversal lower ensue. After hitting these lofty heights last Thursday, the USD/INR declined on Friday and traded near the 74.5800 mark. Upon opening for trading this morning the USD/INR gapped lower and is near the 74.4500 vicinity as of this writing.

Yes, the USD/INR has seen a rather dramatic climb higher the past month of trading, but intriguingly, while being able to attain a high on Thursday, this juncture merely tested marks already seen on the 2nd of July and did not seriously break through resistance levels. After attaining a nearly exact high price on the 2nd of July, the USD/INR then traded near lows of 74.2500 on the 5th, one week ago.

Technically, this opens the door for consideration that support levels may become rather attractive to bearish speculators. Short-term traders may feel that last week’s lows are legitimate targets and lends itself to the belief if these junctures prove vulnerable below, another leg down could be exhibited. However, for the time being, the lows seen on the 5th of July may prove to be overly ambitious.

The USD/INR can produce sudden spikes, so traders need to remain cautious regarding their use of risk management. Traders may be tempted to sell the USD/INR on slight reversals higher which come within the 74.4600 to 74.4800 ratios and look for quick-hitting trades which aim for nearby support levels. From a risk/reward standpoint, after a rather durable bullish run higher, traders who do not mind stepping in front of the month-long trend may feel that the opportunity to sell can produce better results.

USD/INR short traders still need to worry about resistance. If the USD/INR should produce a stronger reversal higher and begin to trade above the 74.5000 juncture and test the 74.5500 level, this would not be a bearish signal.

However, if the USD/INR remains under the 74.5000 ratio and fails to test the juncture in a serious manner, there may be growing sentiment that the USD/INR is starting to lose its upwards momentum it has displayed rather forcefully over the past month. The Forex pair may be ready to reignite a rather interesting bearish trajectory it produced from late April until late May.

Indian Rupee Short-Term Outlook:

Current Resistance: 74.5500

Current Support: 74.3800

High Target: 74.6700

Low Target: 74.2700

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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