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  3. Forex pair analysis for the week 27 Feb to 03 March 2023

Forex pair analysis for the week 27 Feb to 03 March 2023

USD/INR

For the fifth consecutive week the pair saw constant buying interest and posted a green candle. However, the size of the move is narrowing viz. between 82.56 & 83.02. From Oct 2022 we have seen this as the third attempt to cross 83 mark. The question is whether it will breach this time. While we may expect the supply to improve closer to 83 mark, we cannot rule out the chances of one spike to 83.50-83.70 and then cool-off. Alternatively, if the 83 holds for a couple of weeks more we may see the reversal towards 81.80. Till we see a daily close below 81.80, we can assume that the pair would continue the consolidation phase between 81.80 and 83.30. 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:

  • The currency is attempting the top of long term trend line
  • Dollar Index-DXY is likely to break the familiar range of 101-105. However, there may not be major impact seen on the pre-existing range
  • 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. It is a million-dollar question whether this zone will be breached. If breached, we may see another out of spike towards 85.70
  • Candle formation does not indicate immediate risk. Yet the impact on businesses would be immense if it does happen

The increased volatility and wild swings likely to continue With this back drop it would be preferable to hedge the outward remittances on decline towards 81.60 or lower if seen. Current exchange rate of USD/INR is 82.87.

EUR/INR

Current EURINR exchange rate is 87.42. The pair is finding it difficult to breach crucial resistance at 88.60. For now, it appears that the pair is in a consolidation mode between 86.60 and 88.60. The weekly candle is showing negative bias. Ensuing week is crucial for the pair to sustain the higher levels or give way for a correction/consolidation phase. Any breach of the support at 86.50 would see the pair drift towards 85.60.

It is prudent to look for key levels to hedge the risk. From a remittance perspective it would be prudent to book any outward remittances on slide towards 86.50 levels and the inward remittances by selling EUR currency against INR around 88.50 or higher if seen.

GBP/INR

The GBPINR currency pair took support at 98.87 and made an incisive candle. The current exchange rate of GBPINR is 99.17. The currency pair may continue to be under selling pressure on every spike till we see a daily close above 101. The pair is expected to consolidate between 98.20 & 101.25 with choppy moves on either side. It may be prudent to liquidate/hedge outward remittances on any slide towards 98.20 levels by buying GBP currency against INR. it is desirable to hedge inward remittances on any spike to 100.60 or higher levels if seen.

Any close outside the range of 98.20 & 101.25 might drag the pair by at least 100 pips in the direction of breach and there would be a need for re-assessment of risk.

AED/INR

The current exchange rate of AEDINR is 22.57. AEDINR pair mirrors the USDINR moves. The pair has seen a reactive rally and attempting the trend line an upward sloping trend line starting Jan 22 which got breached a couple of weeks back. For now, the pair is expected to consolidate between 22.35 and 22.65. We may have to watch for breach on either side for a new 30 pips range.

With this theme in mind the outward remittances may be hedged at the current levels or on any decline towards 22.35.

THB/INR

The current Exchange rate of THB currency against INR is at 2.3726. The expected decline towards 2.3710 is completed. We may continue to see selling pressure on every spike till we see a close above 2.4210. Expect a consolidation between 2.3475-2.4210. Only a break on either side would decide the direction and target.

The outward remittances can be hedged on any decline towards 2.3475 or lower if seen and inward remittances on any spike towards 2.4210.

CAD/INR

The current exchange rate of CAD/INR foreign currency pair is 60.91. The pair made a high of 61.81 but could not hold on to the gains and made a bearish candle. The pair has a characteristic of making alternate Green and Red candles. The range expected for the current week is in a band of 60.70-61.70. Incidental breach of 60.70 would drag the pair towards 60.20.

With this back drop its wiser to hedge the inward remittances by selling CAD currency against INR on any spike closer to 61.70 or above and hedge the outward remittances by buying CAD currency on any decline closer to the lower end of the range.

MYR/INR

Current exchange rate of MYRINR currency pair is 18.68. The crucial level to watch would be 18.60 from where the pair made a new high of 19.45. For now, it is holding as the selling seems to have slowed down. Break and daily close below 18.60 would lead to further sell-off towards 18.15. Expected range is 18.60-18.85. Any break on either side would decide the direction and target. Preferable to hedge the commitments of outwards remittances on any decline towards 18.60 or lower if seen. Also suggested to hedge the inward remittance close to 18.80 or higher levels if seen.

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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