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The USD/INR turned in a rather remarkable March as the currency pair displayed dramatic whirlwind trading while correlating to the broad Forex market.
After testing a high at nearly 82.8800 in the middle of March as the global markets sought risk-averse assets, the USD/INR has produced a solid downturn in the past ten trading days. The trading results within the USD/INR have correlated well with the broad Forex market. Lows of nearly 81.5800 were tested on the 6th of March and then one week later on the 13th, the 81.6600 ratio was touched, after moving towards the 82.2800 level on the 7th of the month. The low was followed by a strong move higher, only to see a rather stark low again, highlighting that volatility while rampant has also been rather understandable taking into account the amount of nervous behavioral sentiment which still exists in the global markets. The USD/INR demonstrates reversals rather consistently.
The USD/INR is not the world’s biggest currency pair by a long measure, but it is certainly increasing in importance. Traders that pursue the USD/INR must understand that domestically the Indian government still controls the ‘free trading’ of the currency pair making the results capable of being disturbed by value gaps on occasion when the Reserve Bank of India acts. However, during the corporate banking crisis in the U.S. and Europe over the past couple of weeks, India has assured its citizens that Indian banks are not exposed to such balance sheet problems.
Fast conditions and dangerous reversals have been seen in the USD/INR as global financial institutions have dealt with the nervous sentiment being generated in the past few weeks, but for the most part, the USD/INR has also exhibited the capability to trade lower. As of this writing the USD/INR is within the 82.2100 vicinities and this has been accomplished with a rather steady bearish incremental move.
Yes, highs have certainly tested resistance, but resistance levels have shown a tendency to decrease in the past couple of weeks too. And it must be said that the higher values of March within the USD/INR stayed consistently below the highs of February, even as global financial houses faced major concerns about the corporate banking sector.
- Traders need to always be ready for volatility within the USD/INR because of its ability to be ‘pushed’ by domestic moves by the Reserve Bank of India. Risk management is always important.
- The ‘stronger’ resistance of the USD/INR in March and the notion the U.S. Federal Reserve will have to become more dovish over the mid-term is rather intriguing and presents a challenge for USD/INR traders.
The USD/INR has produced the ability to not go over 83.0000 rather well in the past six months, yes the currency pair did trade above this realm in October of 2022 briefly, but reversals lower have been prevalent. The downturn in the USD/INR the past couple of weeks should now be examined to see if the selling trend can continue and if lower depths can be tested again. The 82.1000 level should get consideration in the near term by USD/INR speculators. If this mark starts to see a challenge and trading can remain below the level, it may signal additional downward pressure could develop.
The speculative price range for USD/INR is 81.4200 to 82.7300
The 82.0000 depth of the USD/INR was tested in March and it did prove vulnerable. Global market conditions remain fragile and concerns are legitimate which leaves the USD/INR open to volatile conditions. Traders need to consider behavioral sentiment carefully as they pursue the USD/INR. The currency pair has shown the ability to certainly trade higher, but it has also maintained a rather firm hand on highs and demonstrated reversals lower.
If the U.S. Federal Reserve is forced to actually indicate it will have to dampen its aggressive interest rate hikes rhetoric in the coming weeks, the USD/INR may begin to see a test of lower values again. Traders need to make sure they are using conservative amounts of leverage while wagering on the direction of the USD/INR and not become overly ambitious regarding their chosen direction, because the currency pair does have the ability to reverse rather rapidly. The pursuit of lower values in the USD/INR may seem like a worthwhile consideration for the time being, but speculators should not become too stubborn.
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