USD/INR Analysis Today-23/01: Relative Stability

(MENAFN- Daily Forex)

• The USD/INR is near the 86.4900 ratio at the time of this writing.
• Yes, the price written is part of the bid and ask process, speculators who want to pursue the currency pair must consider the wide spread being offered at all times.
• The USD/INR also is near prices seen at this time last week, but during the past few days has certainly shown signs of price action as lower marks have been seen followed by move higher.

A low in the USD/INR was sparked on Tuesday's opening when a gap lower took the previous day's close from around 86.5600, and then saw an immediate decline to the 86.1800 ratio. However, this gap to depths not seen since the 13th of January quickly vanished. A fast climb upwards reestablished higher values and since then a range between 86.3500 to 86.5600, with some outliers, has been steady.

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The USD/INR remains under the control of the Reserve Bank of India. While the currency pair has certainly created upside and actual price velocity higher in the past couple of months, the USD/INR has seen rather controlled movement when compared to many other major currencies who have experienced greater volatility. Resistance levels near the 86.6000 level still appear to be durable for the near-term.

The question shadowing the Indian government and Reserve Bank of India is how they will try to position themselves during the coming storms, when President Trump starts to enact trade policy. For the moment India is not in focus, but there could be knock on effects which come if the Trump administration causes China to alter its economic controls. The USD/INR may not be directly related to the value of China's Yuan, but inflation caused by concerns regarding tariffs over the mid and long-term to China will cause India's financial institutions to consider altered outlooks Bank of India and the USD/INR

It is likely the Reserve Bank of India will continue to practice a reactive model regarding currency flows and policies. The USD/INR has seen a run higher in a slow incremental manner since March of 2024. This loss of value in the Indian Rupee is likely not going to see a sudden change of momentum lower in the coming weeks.

• The USD/INR appear ready to quietly move along and display occasional moves higher more consistently than moves lower.
• Traders who are able to play a long game and maintain the purchasing of USD versus the Indian Rupee may benefit if they are patient and have the ability to make pursue the currency pair.

USD/INR Short Term Outlook:

Current Resistance: 86.4920

Current Support: 86.4380

High Target: 86.5250

Low Target: 86.3810

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