The USD/INR has certainly enjoyed a steady bullish trend the past month. Speculators who have been slugging it out within the Forex pair and continued to seek downward momentum may feel extremely anxious while observing technical charts now. June was difficult for traders with bearish sentiment who remained stubborn and wagered against the upwards momentum.
However, after hitting a high of nearly 74.9000 on Friday, the USD/INR has seen headwinds develop. Some traders may interpret the selloff as a reaction to new highs being tested which had not been seen since the later stages of April. That may not be the whole story, though; U.S jobless data came in stronger than expected, and the previous month’s job totals were revised upwards too.
Technically, the USD/INR has been climbing higher the past month and brushing aside resistance levels with ease, and some of this momentum was powered by the belief the U.S Fed would become more hawkish. Friday’s jobs numbers will create more arguments within the U.S regarding its economic outlook, but there are no clear winners taking into account the massive amount of U.S stimulus in effect and still being proposed.
Traders should also take into account that U.S financial institutions will largely be absent from the Forex markets today because of a long holiday weekend. Meaning, USD/INR traders should expect volatility near term to remain a possibility. As of this writing, the USD/INR is hovering near the 74.5000 level and current resistance looks rather solid near 74.6100. The opening this morning for the USD/INR produced a gap lower, so support near the 74.4600 should be watched, and if it is broken lower, the 74.4000 to 74.3600 junctures should be paid attention.
Having opened with lower values today, the USD/INR may now produce choppy results over the next 24 hours as it waits for more clarity from U.S financial institutions which will only return tomorrow. The question is if the highs made in the USD/INR on Friday were a result of technical and nervous momentum which took place before the U.S jobs results. The fact that a selloff has occurred in the aftermath may signal that another leg down could be demonstrated near term. Traders should be patient today and place cautious wagers. Looking for more selling momentum from the USD/INR near term may prove to be a worthwhile wager, but risk management is needed.
Indian Rupee Short-Term Outlook:
Current Resistance: 74.6100
Current Support: 74.4600
High Target: 74.7300
Low Target: 74.3200