USD/INR Analysis Today - 02/01: Low Volumes Rise (Chart)

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Created on January 02, 2025

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The USD/INR continues to languish at the top of its apex highs and awaits impetus from global Forex which will remain relatively quiet today as financial institutions largely do not participate.

The USD/INR is near the 85.7775 as of this writing with extremely quiet trading being demonstrated. Most global financial institutions will stay away from Forex today as the holiday season begins to end but has one weekend ahead. Next week when financial offices see the return of their employees, Forex will again begin to see large volumes.

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For the moment the USD/INR remains almost pinned to apex highs, but speculators who are looking for short-term wagers today need to be ultra-careful because dangers could cost them money. The spread in the USD/INR will be large today and tomorrow because of the lack of volume and significant players absent from the market place. If a trader must place a USD/INR position today they are urged to use an entry order to make sure they are getting a fill that meets their expectation. The prices being displayed on brokers platforms are wide via their bids and asks today.

Bias and Speculation in the USD/INR Technically

The USD/INR continues to occupy values which look very high, but there doesn’t seem to be much push back from the Indian government, nor the Reserve Bank of India regarding the higher values. This seems to indicate the Indian Rupee is still considered within an acceptable price range and may be allowed to challenge new highs in the coming weeks. Looking for a sustained move lower in the USD/INR simply because it is thought to be overbought could prove to be a costly mistake.

While many speculators may tend to lean into the notion that the USD is too strong and that other major currencies will begin to show power of reversals, global financial institutions remain fragile regarding their outlooks. Financial institutions are unlikely to bet against the USD in a massive way until they feel more certain about economic policies and trading agreements with the soon to be Trump administration.

USD/INR Outlook and Higher Values

The USD/INR remains within record values technically, but the past two weeks of trading results must be treated skeptically. Today and tomorrow’s trading volume will remain low. The potential of a reaction to the higher price range of the USD/INR is not likely to be seen until early next week.

What the USD/INR does Monday through Wednesday of next week will be important.
If the currency pair continues to traverse its higher ratios as Thursday and Friday of next week draw closer, and as the U.S Non-Farm Employment Change numbers are about to be published on the 10th of January, traders could see even more volatility.
Firms looking at the USD/INR also must take into consideration the Reserve Bank of India’s role in the Indian Rupee, because they will certainly be a factor next week too.