USDINR-Weekly Outlook-Venkat's Blog

2023年7月29日

Past week saw another rare attempt of 81.67. However, the market witnessed a strong buying interest and the pair swiftly rose to 82.33 and finally settled at 82.20. As observed in the previous Blogs, it is evident from the market action that the declines are used as opportunity to hedge the Imports. Markets would be confused on the logic of this magic number 81.70 which has been holding since Feb 23 except for a marginal breach in March & April 23. It is evident from the charts that if 81.70 is breached on weekly closing basis there are possibilities of lower levels towards 81.55 and then 81.15 and even 80. Having made failed attempts, we may expect a consolidation between 81.75 and 82.55. There could be choppy moves within this range. A close outside this range requires re-assessment of risk/direction and target.

A few more observations:

• As noted in the previous blogs, intend to keep the following input for quick reference.
  
• The 82.75-83.25(with error adjustments) zone is the Fib projection of July 2011 to July 2013. Hence, the importance. If breached, we may see another spike towards 85.70.
  
• Neither the moves in Dollar Index-DXY nor the equity have direct correlation
  
• A deeper correction is long overdue. Market is expecting 81.70-83.10 will be protected. If appears that the same kind of yo-yo moves may continue till one more quarter if we do not see a close below 81.70
  
• The raising upward channel indicate the broader range of 77.10-85.30
  
• Unlike in the past, the Imports (mainly the oil) are being hedged as and when there are lower prices in Oil and/or lower prices in the currency pair
  
• A decisive week ahead. Last week there was a breach of the support at the base of the triangle. Yet there has been sharp recovery to be back inside the triangle
  
• The narrowing of the Bollinger Bands suggest we can expect sharp moves sooner. 85+ or 80- is a strange puzzle.
  

Disclaimer: The views expressed here are personal and not connected to SYFX Treasury Foundation. The views are for learning and reference purpose only.