The outlook is still bullish.

Bullish View

• Buy the USD/INR and set a take-profit at 79.63.
• Add a stop-loss at 78.58.
• Timeline: 1-2 days.

Bearish View

• Set the sell-stop at 78.74 and a take-profit at 78.0.
• Add a stop-loss at 79.50.

The USD/INR pulled back sharply on Thursday morning as the spectacular rally faded. The pair dropped to a low of 78.53, which was lower than this week’s high of 79.32. It is still remarkably higher than where it started the year at.

US Jobs Data Ahead

The Indian rupee has been in a strong sell-off against the US dollar as investors have embraced a more risk-off sentiment. They have favored moving to the relatively safer US dollar as risks of a recession rise amid the extremely hawkish Federal Reserve.

On Wednesday, minutes by the Federal Reserve showed that the bank was committed to continuing hiking interest rates in the coming months. Only one member of the committee – Esther George – opposed the giant 0.75% rate hike that happened in June.

The minutes also revealed that members were optimistic that they will implement another 0.75% or 0.50% rate hike in the coming meeting. All these actions, together with the performance of commodities, have increased the possibility of a recession. As a result, investors have moved to the safety of the US dollar.

The next key catalyst for the USD/INR price will be the upcoming US non-farm payroll (NFP) data that will come out on Friday. Analysts expect the data will show that the economy created more than 200k jobs in June while the unemployment rate remained at about 3.5%.

The pair will likely react mildly to estimates by ADP that will be published on Thursday. Historically, ADP numbers tend to have a significant divergence from the official ones. The US will also publish the latest export and trade numbers.

There is no scheduled economic data from India on Thursday and Friday and the next meeting by the RBI will be in August. Therefore, the USD/INR price will mostly be influenced by the US dollar.

USD/INR Forecast

The four-hour chart shows that the USD/INR pair has been in a strong bullish trend in the past few months as the rupee crashes. The pair is trading at 79, which is slightly below this week’s high of 79.33. In most periods, financial assets tend to consolidate or have a pullback as they near a key resistance level.

The pair is still above the 50-period moving average while the MACD has moved made a bearish divergence pattern. Therefore, the outlook is still bullish, with the next key price target being the second resistance of the standard pivot point at 79.64.

The pair will likely keep rising in the near time.

Bullish View

• Buy the USD/INR and set a take-profit at 81.
• Add a stop-loss at 78.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 79 and a take-profit at 78.
• Add a stop-loss at 81.

The USD/INR pair continued its bullish trend and is hovering near its all-time high. It is trading at 79.20, which is about 7.5% above the lowest level this year. The Indian rupee has crashed by over 25% from its lowest point in 2018.

Indian Rupee Crash Continues

The USD/INR pair has been in a strong bullish trend in the past few months as the dollar strength continues. The dollar has gained against most developed and emerging market currencies. For example, the euro crashed to a 20-year low against the US dollar. Similarly, the Japanese yen has fallen to a 24-year low.

The Indian rupee has crashed even as the economy has done better than other countries. Data published in June showed that the country’s economy expanded to over $3 trillion and is about to become the fifth-biggest economy in the world.

Data published on Monday showed that India’s exports rose to over $37.94 billion in May while imports rose to $63.5 billion. As a result, its trade deficit widened to over $25 billion. Still, exports have jumped on an annual basis.

Additional data showed that India’s services PMI rose from 58.9 to 59.2, which was better than the median estimate of 58.7. The manufacturing sector has also continued doing well in the past few months. This performance is partly because India has benefited from the crisis in Ukraine since it is getting cheaper oil and gas from Russia.

The USD/INR is rising as the actions of the Federal Reserve and the Reserve Bank of India (RBI) converge. The Fed has hiked interest rates three times this year and analysts expect that it will hike in all the remaining meetings. The RBI has also turned hawkish and is expected to hike rates several times this year.

USD/INR Forecast

The four-hour chart shows that the USD/INR pair rose to a high of 79.35. This price is significantly above the important support at 78.28, which was the highest point on June 13th. The pair has moved above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) and the MACD have continued rising.

Therefore, the pair will likely keep rising in the near time. The next key resistance level to watch will be the psychological level at 81.

The USD/INR continues to mount an attack on apex highs, as the bullish trend in the Forex pair remains firmly within its upper price range.

The USD/INR has kept its upward momentum intact the past month of trading.  After achieving all-time vales in April, some traders may have believed the Forex pair had been overbought and that the USD would give back some of its value against the Indian Rupee; this did not happen.

Instead the past few weeks have seen new highs attained by the USD/INR. Yes, the pair has reversed slightly from its highs of about 77.9000 which were hit on the 16^th and 20^th of May, but the current value as of this writing near 77.6060 is still a relatively short distance from these upper tier ratios.

Speculators who dare to enter the USD/INR with positions need to understand that a complex puzzle needs to be solved. The U.S Federal Reserve will conduct another interest rate meeting on the 14^th and 15^th of June, and it is nearly certain another hike of 0.50% will be added to the current borrowing rate. While this number has likely been traded into the USD/INR already by financial institutions, what is unknown is what the U.S central bank will say their outlook for more rate hikes will be this coming summer in July and August.

Technical traders may not want to take any of the above into consideration regarding the Federal Reserve, but it may be wise to at least know when to expect the volatility that the decision making and pronouncements will inflict on the USD/INR.  While moving around near all-time highs the USD/INR may appear overbought and long term this may prove to be the case. However, day traders who want to hold onto a position for merely a day or two – or even only a few hours, do not have the luxury or the need to consider what the price of the USD/INR will be this time next year.

Momentum has been upwards and the prevailing question for speculators looking for short term wagers is when a reversal lower will develop, or if the upwards climb is simply going to continue?  While it may have been tempting to say the 77.0000 level would prove to be a stop gap area for the USD/INR in May and that a reversal lower would occur, this has not proven to be correct. The 78.0000 juncture is clearly within shouting distance and taking into consideration the volatility that is bound to occur in the second week of June, due to the U.S Federal Reserve lurking in the shadows, traders need to plan for more volatility.

USD/INR Outlook for June 2022

Speculative price range for USD/INR is 76.7300 to 78.3500

Short term speculators should expect the current price range of the USD/INR to continue to produce fireworks. However the fireworks may only be demonstrated with sudden bursts of energy after further consolidation has taken place. The past week of trading has produced a rather tight range and this may prevail as institutional traders become more cautious in the coming week. If the USD/INR stumbles lower to the 77.4500 realm in the near term, it might prove to be a solid opportunity to look for some upside with buying wagers. Speculators should expect choppy conditions to linger the next two weeks.

The USD/INR is likely to traverse its current range, but if a stronger buying surge seeps into the Forex market for the USD, the forex pair could suddenly start to challenge the 78.0000 realm in June. While the USD/INR at a price of 78.1000 may seem too high, the Forex market doesn’t care about an individual’s ‘feelings’.  A higher move around these ratios could be the result of speculative bets by large institutions, which think the U.S central bank is going to remain stubborn and say they want to raise interest rates not only in June, but in the summer also.

The USD/INR ended the month of April holding onto bullish gains made in choppy conditions, and as May begins traders of the Indian Rupee will face challenging tests.

The USD/INR enters the month of May having held onto bullish gains, but showing signs of slight technical selling. Traders need to be prepared for the potential of a chaotic week ahead with the USD/INR, as the U.S Federal Reserve announces their key interest rate this coming Wednesday. The Fed is expected to raise interest rates by half a basis point – meaning an additional 0.50% will be added to the current rate.

The U.S central bank has let the financial world know in advance its thinking. What day traders need to understand is that a lot of the ‘stronger’ USD results which are reasonable notions, have likely already been ‘baked’ into the results of the USD/INR. Meaning that the USD has been bought on the assumption interest rates from the U.S are going higher. This brings up the time honored idea amongst traders that the rumor should be bought and the fact should be sold.  

Some technical traders may not want to know what the U.S Fed is doing and have a disdain for all pronouncements from the central bank, but it may be a good idea to have some knowledge of fundamentals.  If in fact the trading adage of ‘sell the fact’ plays out when the U.S Federal Reserve makes their interest rate hike official, the USD/IND is likely to see a significant amount of fast and volatile trading. Speculators with limited amounts of money who cannot afford to wager in the anticipated choppy conditions should be extra cautious early this week.

Technically financial houses still have a couple of days of trading to position their USD/INR holdings before the U.S Fed makes their announcements.  This will likely set the table for choppy conditions in the next couple of days. A high of nearly 76.7800 was seen on the 26^th of April. It would not be surprising to see this mark challenged again near term. When the interest rate announcement comes from the U.S, traders should expect to see sudden spikes in both directions in the USD/INR develop momentarily.

In March the USD/INR did climb to a record high of nearly 77.1500, and some traders may be wondering if these values will be attained again.  This could certainly be the case and traders need to use their risk taking tactics capably to guard against fast moves, and also to potentially take advantage while using take profit orders. If the U.S Fed delivers an interest rate hike, talks about the potential of another move higher within the next two months, speculators should understand this rhetoric has largely been anticipated by financial institutions trading the USD/INR.

Perceived notions of things to come and the actual rhetoric will make for an intriguing week and month of trading for the USD/INR. Speculators who have the ability to wager with the USD/INR will certainly find a volatile range to take advantage of, but the price movement could also prove dangerous.

USD/INR Outlook for May 2022

Speculative price range for USD/INR is 75.2500 to 77.1600

If selling pressure mounts in the USD/INR as a reaction of anticipated moves from the Federal Reserve, downside price action could erupt. The 76.3000 level should be watched, if it proves vulnerable there is reason to suspect the 76.0600 mark could be challenged and if this price vicinity falters, the USD/INR could break lower and move towards the 75.7500 ratio rather quickly. A move below 75.7500 could actually trigger additional tests lower and depths of 75.4000 would not be completely astonishing.

Turbulence within the USD/INR will certainly take place and buying spurts will also likely be seen in the coming days as nervousness prevails. The USD/INR has climbed higher the past week of trading and has held onto some its loftier price range. If buying pressure is demonstrated the 76.7000 level should be watched, if it is broken higher a test towards 76.9300 could be exhibited. Additional moves higher could be generated, but if this occurs they will likely be momentary bursts. Traders are urged to use risk management with the USD/INR.

The USD/INR exploded higher in the second week of March and touched all-time highs, before slowly beginning to ebb lower in an incremental fashion.

The USD/INR is trading near 75.7000 as of this writing, which is very close to values the forex pair started the month of March as momentum to the upside was becoming technically apparent. On the 7^th and 8^th of March the USD/INR shot past the 77.1000 level briefly as global forex trading also wobbled and financial institutions reacted to global political and economic issues. The high within the USD/INR achieved on the 7^th of March reached an all-time high.

Traders of the USD/INR have had to deal with volatility that likely proved costly if too much leverage was used and the wrong direction was chosen.  After hitting the apex highs at the end of the first week in March, the USD/INR began to trade in a more reasonable manner and started to produce downside. Incrementally the USD/INR has broken short term support levels, but speculators should remain ultra-aware regarding the forex pair’s ability to move fast.

The USD has taken a very strong undertone as the U.S Federal Reserve has begun to initiate it interest rate hikes.  However as experienced speculators may know, the price of the USD/INR may have reacted too strongly to the combination of political and economic concerns shadowing the financial markets. The steep climb in the USD/INR appears to have been overbought to most observers. However, betting against the trend as velocity ran lightning quick in the first week of March may have resulted in significant losses for those trying to sell the USD/INR before it reached its apex highs.

The current price of the USD/INR still remains relatively high, but traders may feel quite nervous about looking for downside with questions still looming globally that could affect forex.  The use of stop loss, and entry price orders is urged for traders who want to participate in the USD/INR. Traders should remain realistic regarding their price targets in April and should remain conservative.

The belief that U.S Fed interest rates have already been ‘baked’ into the price of the USD/INR may prove to be correct.  However it doesn’t mean an instantaneous selling reaction of the forex pair will ignite and cause the USD/INR to suddenly test lows it has not seen since February when the 74.750 mark was being tested within a rather choppy range.

Traders may want to pursue technical trends, while hoping for reversals.  The notion the USD/INR has displayed its most violent trading results may be logical, but speculators are encouraged to use their risk taking tactics carefully. Choppy trading during the month of April is likely as financial institutions react to sudden ‘noise’ that develops from afar.

USD/INR Outlook for April 2022:

Speculative price range for USD/INR is 75.1600 to 76.3700.

The 75.5000 level appears to be important short term support; if this level is proven vulnerable another wave downwards could be produced. Intriguingly the 75.6000 juncture may prove to be a sensitive trading area, this because the value of the USD/INR began March around this level. If this support level is broken lower and sustained, traders may believe a ‘recovery’ in strength for the Indian Rupee is about to emerge and challenge lower values.

If the 75.5000 breaks support and shows price velocity, the next logical level to look for may be the 75.4000 ratio. Prices below this juncture may produce a lot of buying from speculators who then seek reversals higher. Should the USD/INR actually fall through the 75.3000 level, lower depths could be demonstrated and be attractive for traders who believe the forex pair is then oversold in the short term.

Traders looking for upside may want to wait to remain patient and look for support levels to be flirted with in order to ignite buying positions. Having traded above the 76.0000 mark and even the 77.0000 level in March, the USD/INR displayed an ability to create massive moves higher, but these heights may prove to be too high for the forex pair moving forward. Bullish traders may find their best results waiting for lower levels to be hit and looking for quick hitting reversals upwards in the coming weeks. The USD/INR at 75.9500 appears to be overbought, but recent trading has proven logic sometimes does not work when market conditions are fragile.