USD/INR Forecast: August 2023

The USD/INR appears set to begin the month of August within the middle of its price range that it has traversed the past few months.

The USD/INR has experienced a rather intriguing price range the past few months and will likely begin August above the 82.0000 level in a comfortable fashion.  While the USD/INR does trade with a great amount of volatility for day traders making speculative wagers on changes to fractional values, the currency pair has actually delivered a rather solid amount of consolidation since September of 2022. Forex traders who are using large amounts of leverage will not believe the USD/INR has actually been stable, but the price range of the Forex pair since late September of 2022 until now has largely been between 81.0000 and 83.0000 with a few outliers.

The Indian government has refrained from raising interest rates like other major global central banks and has seemingly relied on quiet interventions, allowing these interactions with the USD/INR to be ‘rumored’ as they maintain equilibrium they want. The rise of the USD/INR since May of 2022 in some ways reflects the start of time when the U.S Federal Reserve started to speak about the potential of becoming aggressive regarding its interest rates.

Meaning the USD/INR has become bullish during this time, this as the Indian government has not raised interest rates in the same manner, allowing inflation to hit the India economy without raising taxes. The USD/INR traded at a low of nearly 81.6400 early last week when it was whispered the Reserve Bank of India intervened momentarily.

Trying to take advantage of what has become a known range in the USD/INR is sometimes difficult. Yes, the USD/INR certainly correlates to the global Forex market. The Indian Rupee is growing significantly more important because India is attracting plenty of international investment into its equity market, and with direct business cash inflows. However, the government of India appears to be using their ‘invisible hand’ to maintain a price range in the USD/INR they feel comfortable with economically.

• The ability of the USD/INR to climb back over the 82.0000 mark and now traverse near the 82.2500 ratio is interesting, because this is a higher value and one that might seem too high considering how other major currency pairs have recently produced rather solid bearish price momentum.
• Technical traders have a reason to be skeptical regarding economic data correlations sometimes with the USD/INR and might believe behavioral sentiment via chart interpretations work best.

The past few days has produced a sustained move higher for the USD/INR, but oddly it came before the U.S Federal Reserve released its FOMC Statement.  If the USD/INR maintains its ‘higher’ price realms this week, it might be a signal some selling could develop, but speculative wagers should practice solid risk management. U.S Average Hourly Earnings will be released this coming Friday and could prove important regarding inflation results.

Speculative price range for USD/INR is 81.7500 to 82.5800

The value band of the USD/INR has been challenging the past month and can be perceived as fast price action.  However the currency pair actually continues to maintain a rather known range and traders need to have their wagers set according to their comfort levels regarding support and resistance levels. In many cases speculators are using too much leverage and this makes the USD/INR dangerous to trade as it moves within Forex.

The ability of the USD/INR to climb higher since the middle of last week is intriguing and if the move upwards can be sustained in the near-term, speculators may look at resistance levels above and wonder where a reversal lower will develop. The 82.3000 to 82.4000 price vicinity may look high for speculators and tempting as a place to sell the USD/INR, but they should note that higher prices have been seen before and in the first week of July the currency pair touched the 82.8000 ratio.

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