The USD/INR remains within a largely consistent price range and speculators may feel they have the ability to chase the Forex pair with limited risk.
The price range of the USD/INR has remained rather steady technically. A low of nearly 74.0000 was produced on the 18th of November, but the juncture proved solid and the USD/INR again moved higher and has tested the 74.56000 resistance area above, while also moving back towards support near 74.35000. The ability of the pair to maintain a tight trading ground may entice speculators who want to pursue technical highs and lows which are nearby during the next few days.
Before a trader launches their position however, they should also be aware that transactional volumes within Forex will decrease significantly in the next day. US financial institutions will be shuttering for a long holiday weekend which starts on Thursday, but a lot of their Forex trading was likely front loaded into the early part of this week, allowing trading desks to relax today and during the Thanksgiving holiday.
Because of the absence of many large US players in Forex the remainder of this week, when large orders do come into the market the USD/INR could see momentary volatility if orders are not balanced. Therefore traders should be using risk management carefully to guard against the potential of sudden spikes which could appear at of nowhere.
Resistance above the 74.43000 mark continues to look like an important road sign. Yes, values have gone above this level, but if a trader believes the 74.45000 to 74.50000 juncture means the USD/INR is overbought, the ratio of 74.43000 could prove a lynchpin to ignite selling positions to seek reversals lower. Short-term trading endeavors may be a worthwhile tactic the remainder of the week. The USD/INR could prove to remain consolidated because of the lack of large trading volumes. Take profit and stop loss orders are highly encouraged.
If the USD/INR does go in up or down in a large direction starting tomorrow, it is likely due to a huge transaction which may prove to be a trigger for a reversal which will try to create equilibrium again. Traders should keep their eyes open for large moves near term that seem to go against short-term technical perceptions, because they may provide an opportunity to wager on reversals which could bring the USD/INR back to its current price range.
Indian Rupee Short-Term Outlook
Current Resistance: 74.4700
Current Support: 74.3500
High Target: 74.5900
Low Target: 74.2600