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The USD/INR has moved swiftly lower since opening for trading this morning, producing a gap and brushing support levels aside rather easily.
The USD/INR is near the 82.1500 ratios as of this writing having essentially started the day’s trading session with a large gap lower. The USD/INR has reacted like most other major currency pairs as the USD has experienced a sharp selloff. The U.S. Federal Reserve raised its interest rate on Wednesday by 0.25%, but the monetary policy statement which followed has made financial institutions rather bearish regarding their Forex trading outlooks taking into consideration the USD.
Having shown an ability to hint at the potential to challenge the 83.0000 ratios the past few trading days while bouncing along near the 82.7000 mark on Monday, Tuesday, and Wednesday of this week, the USD/INR has perhaps been given an ‘all clear’ signal that stronger buying has subsided. Meaning the reversal lower signifies that many financial houses may think the worst of the U.S hawkishness via the Federal Reserve has now been witnessed and that a more dovish future is in store regarding U.S interest rates.
Economic conditions remain rather cloudy globally concerning inflation and the banking crisis. Financial houses have not heard the last of these two worries, but the U.S. Federal Reserve’s rhetoric shows they are in a difficult position. Inflation is a concern, but corporations are certainly warning about the potential of a U.S. recession.
Most traders have interpreted the Fed’s monetary policy statement as evidence they will not raise much more going forward and that rate cuts should be expected later this year. Traders now need to look at mid-term price charts to try and decipher where Forex pressure will develop in the USD/INR.
- The dramatic move lower this morning sets the stage for support levels near 82.0000 to become a talking point.
- Short-term traders should remain realistic regarding their targets and not become overly ambitious. Narrow goals and solid take profit and stop loss orders remain important.
- Resistance levels should be watched carefully by traders near the 82.1900 to 82.2100 ratios, if these prove durable it could indicate more selling to come in the USD/INR near term.
The wave of volatility that has hit the USD/INR should not have come as a surprise, now traders must try to interpret technical levels mixed with existing behavioral sentiment. Financial houses remain nervous because of the corporate banking crisis which has hit investors the past two weeks, but if worries can calm down this may set the stage for a return to more tranquil waters for the USD/INR and broad market.
Current Resistance: 82.2000
Current Support: 82.1200
High Target: 82.3040
Low Target: 82.0400
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