USDINR-Weekly Outlook-Venkat's Blog

9 Sep 2023

Past week saw a a sharp move past 83 and attempted 83.22. Every time the currency pair attempt above 83 the panic buttons are pressed. The earlier breach above 83.10 is still fresh in the minds, the buying interest continues as the market is still not sure of a decline below 82.20. It is evident from the market action that the declines are used as opportunity to hedge the Imports. At best we can presume that the range is gradually shifted higher between 82.50 and 83.30. Expect the range of 82.50-83.10 would continue to hold for the week and 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 blog, continue 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. 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. With last week’s move we are back in the same trading range of 82.20-82.90
  
• On analyzing the quarterly and half yearly charts, the risk on the higher side is till 85.70 which is the channel top and the down side is 77.70
  
• We have been witnessing depreciation for the past 12 years starting 2011 with exception of 2017. We are in the ninth month. Will is be another 2017 or as usual?
  
• When India is projected as doing better than many countries, why should the currency have one-way move is a puzzle.
  

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