The USD/INR is traversing above the 75.0500 mark as of this writing with fast conditions dominating market action. Global Forex markets remain nervous as a wave of news regarding the new coronavirus variant Omicron makes headlines. Traders are seemingly reacting to updates which are taking place with a steady pace and making for choppy conditions. However, the upwards momentum of the USD/INR should not be ignored as resistance levels prove vulnerable.
Short-term traders looking for quick lower reversals should be careful and use appropriate stop loss ratios. While a large amount of the upwards climb in the USD/INR has likely been caused by nervous sentiment and ‘flights to quality’ by institutional investors – meaning the USD is getting bought, traders should not overlook the fact the USD/INR has been relatively bullish since the second week in November.
Certainly the dose of nervous trading which has erupted in the markets the past few days has influenced the USD/INR, but this nervous spark may not be superficial. On the 8th of November the USD/INR was trading near the 73.8300 level momentarily. On the 25th of November, the USD/INR was trading near the 74.4700 level. The climb above 75.0000 is likely going to prove the pair has been overbought, but short-term traders need to carefully consider the dangers of stepping in front of the existing trend.
It should be remembered too, that the USD/INR was trading above the 75.1000 level for a couple of weeks rather consistently in October, and this was without fears of a new coronavirus variant. In October during the strong bullish run higher the USD/INR was able to attain values above the 75.5000 juncture momentarily.
Traders need to be cautious in the short term. Global market conditions are likely going to remain volatile the remainder of this week. Yes, this will open the door for speculators to wager on direction, but risk management must be used at all times to protect against sudden bursts of value changes. Quick-hitting trades may prove to be the best trading technique in the coming days.
Looking for fast trading results using take profit and stop loss ratios to get in and out of the market may be a good choice to protect against the potential of spikes. Cautious traders who believe the USD/INR will climb higher near term may want to be buyers on small reversals lower within the present trading conditions.
Indian Rupee Short-Term Outlook
Current Resistance: 75.1700
Current Support: 75.0400
High Target: 75.2900
Low Target: 74.9400