Upwards momentum in this currency pair has taken place the past handful of days as the currency pair has resumed its historical trajectory higher. The conditions in the USD/INR while not correlating completely with the broad Forex market have certainly shown plenty of hints that financial institutions in India are dealing with influences via global investment fury as proactive trading took place before and after the U.S Federal Reserve’s FOMC pronouncements yesterday. Speculators now have an opportunity to study technical results in the USD/INR and synchronize them to their own perceptions.
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USD/INR Gains as Fed Rate Hike and Oil Risks Lift Demand
The Federal Reserve’s interest rate hike late yesterday for traders of the USD/INR likely didn’t surprise many. Hints have been widespread in the global markets that the investment community believed the Fed was going to raise by a quarter of a basis point yesterday, which they did. Speculative intrigue now rests on the evidence that the USD/INR had started to move upwards steadily since this Tuesday, after financial institutions in India began operating after their long holiday weekend and trying to evaluate heightened threats.
The upwards trajectory seen this past Tuesday reflected changes in sentiment as risk adverse emotions swept into global perspectives as the Middle East situation grew more anxious due to the sudden inclusion of Saudi Arabia coming under threat regarding its Crude Oil supply to the world. The addition of the U.S Federal Reserve shadow because of elevated energy costs caused turbulence in the USD/INR into yesterday.
USD/INR Retreats After a Brief Move Above 96.00
Values above 96.0000 were seen early this morning when volumes opened with a fierce amount of reactions after the Fed’s interest rate hike. A spike touched the 96.1000 mark momentarily. But unsurprisingly too, the USD/INR also then began to move lower and the currency pair is now close to the 95.8825 ratio with fast conditions prevalent.
What may prove fascinating to some technical traders of the USD/INR is that current values are below yesterday’s sustained highs which stayed near the 95.0000 to 96.0000 vicinity as financial institutions positioned themselves ahead of the Fed’s FOMC Statement and decision. While the Fed certainly showed it is intent on trying to fight inflation yesterday, it appears financial institutions have reacted to yesterday’s U.S central bank drama by becoming more sedate. Yes, the USD/INR is back within its higher ratios and now day traders need to try and figure out where sentiment will traverse in the short and near-term, this as larger players may be considering their mid-term outlooks.
Higher US Treasury Yields Continue to Support USD/INR
Very few traders of the USD/INR will be overly excited that the currency pair went over the 96.0000 mark early this morning. The upwards momentum in the currency pair – even in the midst of a slightly sideways track recently – has a long standing trajectory which has not changed and is likely not going to change anytime soon.
This is because of factors that India faces from a myriad of complex reasons, including the recent inclusion of stronger Indian Rupee outflows and turned into USD for investment purposes as folks seek higher yielding U.S Treasuries. Retail traders with the ability to pursue the USD/INR need to put bias to the side and remember why they are wagering – to try and make profits.
USD/INR Price Chart
USD/INR Volatility Rises as Traders Assess 95.95
Trading the USD/INR remains a tricky business for small speculators. Volumes remain illiquid at times and thus cause sudden bursts of momentum which are hard to explain. However, the constant climb upwards in the currency pair remains attractive. However, reversals lower and consideration that the USD/INR may be considered to be in overbought territory has been seen even during today’s trading which is maintaining an upwards trajectory. Confused? Do not be. Intraday reversals and the psychology of the USD/INR makes it speculative difficult to trade. However the push upwards to yesterday’s higher terrain may signal this is where financial institutions are comfortable, which may open the door for pursuit of the 95.9500 level in the near-term viable.
USD/INR Sentiment Remains Unsettled After the Fed Decision
Price velocity in the USD/INR has been ripe since Tuesday and this is likely to remain a storyline going into tomorrow. Financial institutions are now reevaluating their stances after the Federal Reserve’s interest rate hike yesterday. The Middle East saga also remain a focal point regarding higher energy costs and its effects on the Indian economy. Opening the door for swift sentiment shifts today and tomorrow as a balance is sought in the USD/INR.
USD/BRL Short Term Outlook:
Current Resistance: 95.9120
Current Support: 95.8800
High Target: 95.9650
Low Target: 95.8670
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