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  3. Currency Views for the Week 28 Nov – 02 Dec 2022-Venkat's Blog

Currency Views for the Week 28 Nov – 02 Dec 2022-Venkat's Blog

USD/INR

After a sharp recovery in the previous week the pair was traded in a narrow range of 81.44-81.93 during last week. However, the Monthly candle confirms the trend reversal. We can safely assume that the top at 83.10-83.30 is expected to hold for the current month and possibly till the year end. We are witnessing demand driven by unhedged exposure getting covered. The ultimate projection for the down move is 79.20 which might take a couple of weeks. Due to various factors the currency is expected to consolidate between 80.70 & 82.70. A close outside this range requires re-assessment of risk/direction and target.

A few more observations:

  • In the previous blogs the comparative analysis of 2018 & current scenario was discussed and suggested a possible correction in Nov 22 which is in progress. We saw nearly a 4 big figure correction in 2018. If the same were to repeat, we may see 79.20 soon.
  • The long term trend line till at 83.10-83.30 levels holds for now and we are likely to see a consolidation between 79-82.
  • The full impact of the DXY correction has not yet been seen in USDINR currency pair.
  • We do not see an immediate threat of crossing 83 .
  • The raising upward channel indicate the broader range of 80.10-82.70.
  • 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 or lower if seen. Current exchange rate of USD/INR is 81.71.

EUR/INR

Current EURINR exchange rate is 84.99. The pair saw volatile moves. After breaking the downward sloping trend line starting from Apr 21 there is no looking back for the EURINR currency pair and it posted a high of 85.36. Downside risk seems limited till it closes below 83.20. We can expect a consolidation between 83.40-85.70. Any breach on either side on a daily closing basis would require re-assessment of risk. It is prudent to look for key levels to hedge the risk. Daily close above 85.40 could trigger a sharp move towards 86.30.

From a remittance perspective it would be prudent to book any outward remittances on slide towards 83.70 levels and the inward remittances by selling EUR currency against INR around 85.70 or higher if seen.

GBP/INR

The GBPINR currency pair is gaining for the third consecutive week and continued to remain volatile. The current exchange rate of GBPINR is 98.83. Decisive break of 97.30 makes the pair to remain biddish. The foreign currency pair may find strong resistance at 100.30. The currency pair is expected to move in a range of 96.30 & 100.30. It may be prudent to liquidate/hedge inward remittances on any upticks towards 100 levels by selling GBP currency against INR.

it is desirable to hedge outward remittances on any decline towards 96.50 or lower if seen. Any close outside the range of 96.30-100.300 might require re-assessment of risk.

AED/INR

The current exchange rate of AEDINR is 22.25. The AED being pegged currency, AEDINR pair follows the USDINR moves. For now, the pair is expected to consolidate between 21.90 and 22.60. We may have to watch for breach on either side for a new 40 pips range. With this theme in mind the outward remittances may be hedged at the current levels or on any decline towards 21.90. A daily close below 21,80 would make the pair vulnerable for further decline towards 21.50.

THB/INR

The current Exchange rate of THB currency against INR is at 2.2873. Last week saw a reactive pull back towards the break-out level of 2.2630 and lower. However, as expected the crucial support at 2.2500-2.2550 range held. Expected range for the week is 2.2630-2.3160. Any close outside the range to be assessed a fresh for direction and target. Only a close below 2.2500 would be considered as reversal.

The outward remittances can be hedged on any decline towards 2.2630 or lower if seen and inward remittances on any spike towards 2.3160.

CAD/INR

The current exchange rate of CAD/INR currency pair is 61.08. Currently the pair is at a crucial price point. For the last couple of weeks, it moved in the range of 60.50-61.40. The pair is seen to be making an attempt to break the barrier at 61.10. A daily close above 61.10 is required for higher levels. The range expected for the current week is in a band of 60.30-61.60.With this back drop its wiser to hedge the inward remittances by selling CAD currency against INR on any spike closer to 61.60 and hedge the outward remittances by buying CAD currency on any decline closer to the lower end of the range.

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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