USDINR-Weekly Outlook-Venkat's Blog

23 thg 3

The pair below 82.80 after nearly 6 months was like a fairy tale and the story proved to be short lived. The tweezer bottom at 82.65 worked perfectly. As expected the pair attempted the long term trend line resistance at 83.09.The market witnessed a sharp move past the boxed range and the pair made a new ATH at 83.69. This comes as shocker for the market as the long protected range of 83.30-83.45 got breached The Annual closing and balance sheet related exposure hedging is likely to keep the pair well above 83 levels.

A few observations
a. Expect the range of 83.30 - 83.70 would hold for the week and there could be choppy moves within this range.
b. There is divergence seen in the charts
c. The currency pair does not seem to follow DXY, Stocks or the Precious metals

A few more observations:
Continue to keep the following input for quick reference though it is repeated for the past 8 months.
• The 82.75-83.25(with error adjustments) zone is the Fib projection of July 2011 to July 2013. Alternatively, the Fib projection of the move from Jan 22(Low) to Oct 22(High) and Nov 22 low also suggest the projection as 82.92. Hence, the importance. If breached, we may see another spike towards 85.70
• As noted in our 3rd July Blog:
o A deeper correction is long overdue. The market is expecting 82.70-83.35 will be protected.
o Ultra-low Vols may be a huge risk and there could be sharp move happening when no one expects

• Next couple of weeks are crucial. The final hope remains at 83.70. If this level breaches on a closing basis, then the Alligator pattern will kick-in and it would be a confirmed move towards 85.70 in the near future.


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