The USD/INR has correlated to the broad Forex market in a rather calm manner the past handful of days. The currency pair remains within a known range and speculators able to wager have a technical ground they may have established some form of trust within. While global markets remain sensitive to the Middle East situation this has created what appears to be room for the USD/INR to breathe via support and resistance levels within a realm that may prove efficient to financial institutions and large players of the currency pair.
Rising Energy Costs Point to a Persistent Upward Bias
While many traders certainly are watching the ongoing saga between Iran and the U.S and are looking over the cost of WTI Crude Oil as a barometer effecting behavioral sentiment and its correlation to the USD/INR, some are also looking at global data regarding inflation data. However, before speculators get swept away in too much numbers reporting, they should also understand the basics of the USD/INR. The currency pair has been engaged in a long-term bullish trend.
Yes, there are intraday, even intraweek, reversals lower like some of the price action seen recently, but as time marches the USD/INR has shown a strong tendency to remain within its upwards trajectory. Higher energy costs are now part of the narrative regarding the USD/INR, but when fuel was relatively cheap the past couple of years – before the Iranian and U.S conflict – the currency pair was also creeping higher.
Wide Spreads Reflect Ongoing Sensitivity to News Flow
The USD/INR is now around 95.3500 and displaying its typical wide spread. Day traders thinking about pursuit should always use entry price orders when betting on the USD/INR. The tactic protects speculators against price fills that often do not meet expectations if entry orders are not used. Current conditions in the currency pair are relatively tame for the moment.
Price velocity for those not using too much leverage has been comfortable up to a point, but sudden gaps remain part of the USD/INR landscape because volumes are historically light. The dynamic of sudden moves upwards and lower can be blamed on reactions to news developments like the saga in the Middle East and inflation reports, but they are also part of the known USD/INR landscape and must be guarded against. Having moved higher the past couple of days the currency pair has shown a healthy relationship to the broad Forex market, but its long-term bullish trend also should be taken into consideration.
Recent Support Levels Suggest Where Stop-Losses May Matter
Market price action in the USD/INR may find that the uneasiness regarding the lack of a defined agreement between Iran and the U.S continues to cause irritation. The price of WTI Crude Oil now looks almost comfortable above the $80.000 mark. Until another dose of optimism comes from the Middle East or confirmation that supply and logistics for delivering energy to Asia, including India, is reliable and can be relied upon this may allow uneasiness to remain in the USD/INR until resolved. Therefore support levels which were tested around the 95.2000 to 95.1500 late last week and on Monday could remain durable as potential lows. Some traders may want to use slightly higher stop loss orders as protection above these marks if they are pursuing upwards momentum.
Long-Term Trend Reflects Deeper Inflationary Concerns
The known price range of the USD/INR should not be treated as concrete by day traders, meaning current values may not remain traversed for long. Technical perspective of the USD/INR over the long-term needs to remain in consideration. If financial institutions come to the conclusion that energy costs are not going to fall below $80.000 and challenge the 75.00 ratio, this may begin to alter the mid-term thinking concerning those faced with positioning for commercial transactions in the USD/INR because of inflationary troubles, on top of the historical bullish USD/INR cycle.
Technical Levels Highlight Cautious Room to the Upside
The price action in the USD/INR the past handful of days has provided a downwards trading and a sudden upwards roar. The results have correlated to the broad Forex market to a certain degree as global assets have proven somewhat sensitive to economic reports from the U.S and the lack of clarity in the Middle East. The USD/INR may appear to have some upwards ability technically to cautiously target per some perspectives near-term, but as always traders need to remain realistic regarding their targets.
USD/INR Short-Term Outlook
Current Resistance: 95.3700
Current Support: 95.3450
High Target: 95.46
Low Target: 95.3210
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