USDINR-Weekly Outlook-Venkat's Blog

Past week saw a brief breach of 81.95 and tested a low of 81.75 and reacted quickly towards 82.75. As observed in the previous blog the declines are used as opportunity to hedge the Imports. Once again, the markets would be looking for lower levels to hedge imports. It appears that the pair seems to be in no mood to breach even 81.70 on a closing basis. In such scenario we may expect a consolidation between 82.30 and 82.75. 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:

• 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.
  
• Neither the moves in Dollar Index-DXY nor the equity have direct correlation
  
• The raising upward channel indicate the broader range of 77.10-83.30
  
• 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. Hence, the importance. If breached, we may see another spike towards 85.70.
  
• This range is continuing to be protected
  
• 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.
  

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