Currency Views for the Week 11 July – 15 July 2022
Even with the Central Bank trying to control the volatility, the USD-INR pair is under serious threat of breaking higher. Technically the pair is expected to remain biddish and the down side seems limited to 78.70. The bigger question is whether the pair would scale the psychological 80 mark. With the current state of risk assessment, we are close to another crucial level of 79.70. Will 79.70 provide a temporary relief? At this point in time the level is likely to be protected or we may find decent supply. It makes sense for booking the outward remittances on any decline towards 79. With the current market outlook, it might make sense to book outward remittances and buy foreign currency on any lower prices seen during the day as the risk perceptions seem to have upward bias. Conversions of inward can be done between 79.50-79.70 range. Once if the market crosses 79.70 on a quick jerk, better to wait for 80.30 for conversion of inward remittance.
There could be a consolidation happening during the week between 78.60-79.70. A daily close outside this range requires re-assessment of risk/direction and target.
The EUR-INR pair has been under pressure for past couple of weeks. With EUR testing close to parity the European Central bank had to step-in to have verbal intervention. With broader Dollar strength and bleak Euro zone the EUR is likely to be under pressure. However, the cross pair could find support around 79.20 & 80.20 which is the previous break-out zone from where it moved to 90+ levels. Upside also appear to be capped at 82.90 for now. Intra-day moves are 0.75-1.00. It is prudent to look for key levels to hedge the risk. From a remittance perspective it would be prudent to book the outwards remittances as close to 80 as possible even though there are chances of the pair drifting towards 79.20. Inward remittances would be ideal to hedge on any spike towards 82 or higher. First hurdle seen around 81.10 and on a daily close above could quickly take the pair to 81.80 and possibly 82.30. Expected range for the week 79.50-82.30.
In spite of political uncertainties in the UK, the pair has moved in a narrower range of 94 & 96 through the first two weeks of the month. Expect the same trend to continue till we see a break on either side. The pair might hit the wall around 97 if seen during the week. Ideal to liquidate/hedge inward remittances on upticks above 96. If the spike is sharper in a short span and seen crossing 96.20 we may see further gains towards 97 levels. Such opportunity could be an ideal chance for hedging the inward remittances. Downside seen limited to 94.50 and the bias appears to be on the upside which could be on account of INR depreciations. Good to hedge outward remittances at current levels or any decline. Expected range for the week 94.50-96.50. Any close outside the range might require re-assessment of risk.
The pair truly replicates the USDINR moves. The risk associated with USDINR pair directly applies here as AED is almost a fixed or low range forex pair. Ideal to watch USD-INR moves and hedge the positions. For now, the range appears to be 21.45-21.65. We may have to watch for breach on either side for a new 20 pips range. Technically the oscillators appear to be showing signs of downward bias. The hedge can be taken in the suggested range.
The pair once broke the long term support at 2.2000 range and plunged to 2.1750 from where it has made a quick reversal. The pair seem to find decent support around 2.1750 and edging higher. Likely to attempt 2.2560 if it manages to close above 2.2180. Preferable to hedge outward remittances and hold on Inward remittances for a spike to 2.24 or higher.
The pair appears to be moving in a range of 60.50 & 61.65 for the past couple of weeks. It is at the cusp of a possible break-out in 61.50 is breached on a closing basis. The downside appears to be limited to 60 80. Hence, for now the risk assessment appears to be favoring an upward bias. Only a daily close below 60.80 could see the pair drift lower towards 60.70. With this back drop its wiser to hedge the outward remittances on any decline towards closer to 61 or lower and hedge the inward on a spike closer to the top side of the range or trigger higher.
Disclaimer: The views expressed here by author are his personal views for learning and reference purpose only. Orient Exchange does not take responsibility for the views expressed.
Author Name: Mr.Venkata Raman
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