USDINR-Weekly Outlook-Venkat's Blog

22 jul 2023

Past week saw a narrow range of 81.91-82.20. After having seen the 79 to 83 moves during Sep 22, the declines are used as opportunity to hedge the Imports which has been highlighted in previous blogs. However, when the DXY has breached crucial 100 mark, there are no reason that the USDINR currency pair holds on to this range. This week is crucial and there are possibilities of lower levels towards 81.55 and then 81.15. If fails then there could be a wait period of another three weeks. In such scenario 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 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
  
• 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
  
• 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
  
• Narrowing of the Bollinger Bands suggest we can expect sharp moves sooner. 85+ or 79- 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.