Currency Views for the Week 18 July – 22 July 2022
USDINR currency pair continues to remain under pressure of breaking higher. There seems to be a demand supply mismatch and Technically the pair is expected to attempt higher levels. At least for now, the down side seems limited to 79.10. Having attempted the psychological level of 80, we may see supply coming at higher levels. With the current market outlook, it might make sense to book outward remittances and buy USD currency on any lower prices seen during the day as the risk perceptions seem to have upward bias. However, it should be noted that the USD has been continuously moving higher for the past several weeks and it may hit the wall around 80.70. Hence, it is prudent to sell USD currency between 80.20 & 80.60. Expect a consolidation between 79.30 and 80.60. A daily close outside this range requires re-assessment of risk/direction and target.
With broader Dollar strength and bleak growth expectations in Euro zone the EUR is likely to be under pressure. However, the cross pair could find support around 79.20.-79.50 range, which is the previous break-out zone from where it moved to 90+ levels. Upside also appear to be capped at 81.80 for now. 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 by buying EUR currency against INR below 80 even though there are chances of the pair drifting towards 79.20. Inward remittances would be ideal to hedge by selling EUR against INR currency on any spike towards 81.90 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 79.50-81.90
In spite of political uncertainties in the UK, the pair has moved in a narrower range. Expect the same trend to continue till we see a break on either side of the range of 94.00- 96.00. Ideal to liquidate/hedge inward remittances on upticks above 96 buy selling GBP currency against INR. 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 94.20-96.20. Current Rate is GBP= INR 94.60 Any close outside the range might require re-assessment of risk.
The AED/INR currency pair truly replicates the USDINR moves. The risk associated with USDINR pair directly applies here as 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 be 21.60-21.90. 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 THBINR pair seems to be under pressure with a breach of long term support at 2.2000. The current Exchange rate of THB currency against INR is at 2.1800. The bias seems to on further downside if the last support at 2.1750 breaks. The expectations is that the pair may drift lower towards 2.1500. As the market continues to off-load, it is better to sell THB currency against INR on any spike towards 2.1000 and wait for Buying THB currency at lower levels.
For the third week the CAD/INR currency pair appears to be moving in a range of 60.50 & 81.65. It is at the cusp of a possible break-out if 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 by buying CAD currency against INR on any decline towards closer to 60.80 or lower and hedge the inward remittances by selling CAD currency 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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