Currency Views for the Week 08 Aug – 12 Aug 2022-Venkat's Blog
As expected the currency pair USDINR saw a sharp move when 79.20 gave way and tested 78.50. However, it recovered quickly. As observed in the previous report, 79.45-79.50 could be the crucial levels and a kind of Pivot. We have to be prepared for 1 INR on either side. The pair appears to have made a temporary top at 80.30. This region could hold for some more time if no fresh risk emerges. The indications are that a top at 80.15-80.30 might hold and the panic buying could ease and we see slow drift towards 78.70 over a period of time. Any daily close above 80.15 would negate this and fresh assessment required for target. Under such circumstances it might be prudent to hedge the inward remittances on every spike and outward remittance commitments can be covered by buying USD currency against INR on any dip below 79.00.
Most likely scenario could be that we may expect a consolidation between 78.50-80.15. A close outside this range requires re-assessment of risk/direction and target.
EUR INR currency pair is creating second base around 79.80-80.10 range. Though the indicators are turning positive, it is also observed that 81.20 is restricting further upside. Most likely scenario would be a consolidation between 79.80 and 81.20 with whipsaw moves. 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 buying EUR currency against INR below 80 on any sharp decline. Inward remittances would be ideal to hedge by selling EUR against INR currency on any spike towards 82.10 or higher. First hurdle seen around 82.30 and on a daily close above could quickly take the pair to 83.20. Expected range for the week 79.80-81.20.
Though the GBP/INR currency pair is known for its volatile moves, surprisingly it has moved in a very narrow range in the past week. Normally the GBP currency moves by INR 3.00 in a week. The crucial level of 96.50 seems to be a strong resistance and the support comes in at around 94.35. Ideal to liquidate/hedge inward remittances on upticks close to 96.50 by selling GBP currency against INR. Good to hedge outward remittances or any sharp decline below 95 Current Rate is GBP= INR 95.90. Expect the same trend to continue till we see a break on either side of the range of 94.35- 96.50. Any close outside the range might require re-assessment of risk.
AED is almost a fixed or low range Foreign Currency pair. Ideal to watch USDINR moves and hedge the positions. For now, the range appears to have shifted lower to 21.30-21.75. We may have to watch for breach on either side for a new 30 pips range. Technically the oscillators appear to be showing signs of downward bias. The hedge can be taken in the suggested range.
The current Exchange rate of THB currency against INR is at 2.2180. it is observed that the long term support at 2.1775 held well and the currency pair is edging higher. As expected we saw the pair moving towards the break-out level of 2.2000. The bias seems to be positive. Expected range for the week 2.2100-2.2450. The hedges for remittances can be made within this range. Any breach would require re assessment of risk.
The currency pair CAD/INR could not penetrate the crucial resistance at 62.10. Expected range for the week 61.00-62.10. With this back drop its wiser to hedge the outward remittances by buying CAD currency against INR on any decline towards closer to 61.00 or lower and hedge the inward remittances by selling CAD currency on a spike closer to the top side of the range or 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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