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This currency pair is correlated to the broad Forex market to some degree, as the higher realms established the week before continued to be demonstrated. Speculators looking at the USD/INR for the moment need to consider the potential of an invisible hand influencing Forex movements. The upper realm of the USD/INR has shown an ability to stay within an extremely limited range, and this makes it difficult for speculators to find enough momentum – unless they are using entry price orders to wager on the USD/INR.
Fragile Sentiment Keeps the Range Under Pressure
Global markets early this morning have turned cautious, the broad Forex market is showing USD centric strength. The USD/INR is within sight of it highest realms but has not found enough buying action to take it beyond its current threshold within a five day technical sense. However, day traders may be right if they are suspicious of the current values being seen in the currency pair and are wondering if forces are striving to keep the USD/INR from challenging upwards heights.
The WTI Crude Oil price remains high, while not at the ultra-levels seen about one week ago above $100.00, current values around $95.00 show caution remain a factor. Inflation concerns globally are becoming a part of the mindsets within financial institutions and the USD remains a magnet for investors seeking safe havens. The USD/INR’s ability to establish a ‘comfortable and tight’ range may welcome volatility suddenly.
A Brief Dip Gave Way to Renewed Buying
At 95.9000 depending on the bids and asks being demonstrated, the USD/INR is fluctuating within a realm that needs strict ordering to wager properly. The wide spread in the pair is common and a lack of significant volume is also detrimental when trying to gauge what will happen in the short-term. The USD/INR did take a ‘break’ from its recent stability shown within its higher realm yesterday, this when the currency pair fell from the 95.8500 vicinity and suddenly found itself near 95.6000.
Since the velocity downwards the USD/INR has crept up incrementally and this morning showed another powerful dose of buying which reestablished the known higher realm seen this past handful of days. Smaller traders will have found profiting from the USD/INR during the fall to be difficult, but intriguingly the selloff that was seen did open the door to potential buying for those who believed higher values would surface again.
Timing the Pair Still Looks Difficult
Day traders of the USD/INR who can wager should continue to use conservative leverage that allows them to participate in the currency pair for at least a day or so. Trading the USD/INR for quick hitting trades is possible, but not only is a little luck needed, but very accurate entry price orders must be accomplished.
The short-term is certainly always going to present intraday volatility which could include reversals, but a slightly longer duration often finds a way to see the USD/INR demonstrate an ability to move upwards. The high costs of energy and current economic conditions in India allows for the belief that incrementally the USD/INR is going to find higher ground. The biggest question for retail traders is how long the target is going to take to be demonstrated.
USD/INR Price Chart – High and Low of Dominant Range
Hidden Forces Continue to Complicate the Rupee
With risk adverse conditions still openly displayed in global markets, it seems logical to continue to look for the USD/INR to increase its known heights. But a shadow of unseen forces does remain an active participant in the USD/INR, the actions of the Reserve Bank of India and the potential for sudden large orders with the ability to take the currency pair lower – as happened yesterday. Retail traders need to understand that betting on the USD/INR remains a challenging task for near-term adventures.
A Sudden Shift Could Still Break the Pattern
While it may feel logical to look upwards when thinking about the USD/INR’s path, the past handful of trading days has clearly shown that resistance levels have been maintained and cannot be counted on to suddenly fold. The tight realm of the USD/INR may vanish with a swift wind, but catching the sudden shift of sentiment that could be demonstrated takes solid risk taking tactics.
USD/INR Short Term Outlook:
USD/INR remains settled near its upper range, but the tight trading conditions may not last if broader risk sentiment changes. Traders should watch whether buying interest can hold above nearby support or whether another sudden reversal tests the range.
Resistance: 95.9210
Support: 95.8800
Upside level to watch: 95.9450
Downside level to watch: 95.8470
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