USD/INR was able to sustain the higher values it set mid last week and speculators will continue to be tested.
The Indian Rupee continues to lose ground against the USD in Forex and as of this morning a value of 79.8700 is shown. Speculative conditions are ripe within the USD/INR currency pair as rising prices are likely to have technical traders wondering if the 80.0000 mark is going to be challenged again. In mid-July, USD/INR was able to trade above 80.0000 temporarily reaching a high near 80.2200 on the 14the of the month.
Even if USD/INR is overbought, it could rise via speculative conditions
The middle of last week shook USD/INR off a seemingly polite trading range, in which downside reversals were beginning to signal evidence that the currency pair’s long-term bullish streak may be slowing. The short-term trend proved wrong, however, and nervous sentiment resurfaced within financial institutions as rumors of more hawkish US Federal Reserve policy were discussed.
The release of the Fed’s meeting report last week indicated that there is disagreement within the US central bank over future inflation-fighting measures.. What is troubling for traders is the fact that USD/INR is on course to hit all-time highs again, and sparks of more fundamental news will fly later this week.
Jackson Hole Talks and Preliminary US GDP Will Affect USD/INR This Week
The world’s major central banks will meet this week in Jackson Hole, Wyoming, which is a symposium for financial heavyweights to discuss monetary policy. On Friday, Fed Chairman Powell will speak. And before that, on Thursday, the United States will release preliminary GDP data. In other words, USD/INR traders should expect more volatility.
- If 17.9000 is reversed and higher is held, USD/INR could challenge 18.0000 again in the near term.
- Behavioral sentiment should remain jittery due to the volatility that will certainly be caused by political speeches and economic data from the United States later this week.
USD/INR traders may be tempted to believe that the currency pair has climbed too high and may attempt to sell. However, near-term lower reversals are likely to remain limited. Quick trades are advised that are not too ambitious today and tomorrow.
A vast sea of volatility will be demonstrated in USD/INR later this week and risk management will be key. USD/INR’s uptrend can be hard to bet for contrarians, but if support levels are tested in the short term, looking for small upward moves could prove useful.
USD/INR short-term outlook:
Current Resistance: 79.9050
Current support: 79.8300
High target: 80.0300
Low target: 79.7100
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