USD/PAK Forecast Today - 29/02: Steady Trend (Video & Chart)
Date
3/2/2024 12:00:41 AM
(MENAFN- Daily Forex)
The U.S. dollar continues to grind right around the 279 level against the Pak rupee as we are just simply killing time. Ultimately this is a market that is very range bound and that's because it doesn't really free float at all. This is a very heavily manipulated currency pair by central bankers, and of course the federal Reserve does not care as the amount of trading between the United States and Pakistan is almost nonexistent.
As I zoom out, you can see that since we made the swing high back here about a year ago, a year and a couple of weeks ago, that has offered support . Notice that the U.S. dollar has been in a massive uptrend against the Pak rupee, but if we continue to see this play out and we could break down below say 275 or so, it could kick off a selling opportunity down to the 240 level based on a massive head and shoulders pattern .
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However, there's really nothing right now that suggests this is going to happen and inflation in the third world continues to rage and in fact, recently we've seen inflation in Pakistan just eat up customers' ability to purchase things. I think this continues to be a major issue but could lead to more central-bank e-zine in Pakistan, which of course could help stocks in that country.
As long as the U.S. dollar continues to strengthen against major currencies, it most certainly will against the Pakistani rupee, which you can see has lost about 70% of its value against the greenback in roughly the last six years or so. A significant pullback based on the head and shoulders pattern could open up a move perhaps down to 240. I think that's an area where you would expect to see value hunters coming back.
But as long as the U.S. dollar remains stubbornly strong, there's just no real hope for the Pakistani rupee to pick up as these smaller currencies really take it on the chin. At this point, there's not a whole lot that you can do, due to the fact that it is highly influenced by the local central bank, and of course the trade between these 2 countries is simply not big enough to substantiate significant amounts of liquidity, something that most Forex traders will not like at all.
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