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  3. Forex pair update for the week 29 May to 02 June 2023

Forex pair update for the week 29 May to 02 June 2023

USD/INR

Past week saw a gradual decline from its peak of 82.85. Now that the market would be happy to see 82.20 as safer level to hedge the Imports. Only a close below 81.70 favors further lower levels. At least for the moment, it appears that the pair seems to be in no mood to breach 81.70 on a closing basis. In such scenario we may expect a consolidation between 82.10 and 83.10. There could be choppy moves within this range. A close outside this range requires re-assessment of risk/direction and target. Market is expecting 82.10-83.10 will be protected. Deeper correction is long overdue. The pair has a tendency to make surprise moves when most in the market do not expect.

A few more observations:

  • Neither the moves in Dollar Index-DXY nor the equity have direct correlation.
  • The raising upward channel indicate the broader range of 77.10-83.30.
  • The currency pair seems to be trying to make one more attempt towards 83.
  • 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. If breached, we may see another spike towards 85.70.
    This range is continuing to be protected.
    Unlike in the past, the Imports (mainly the oil) are being hedged as and when there are lower prices in Oil and/or lower prices in the currency pair.

With this back drop it would be preferable to hedge the outward remittances on decline towards 82.10 or lower if seen. Current exchange rate of USD/INR is 82.57.

EUR/INR

Current EURINR exchange rate is 89.52. The currency pair continued to be under selling pressure and posted a red candle. For now, well supported at 88.00 zone. The currency pair is likely to face selling pressure till the pair manages to close above 90 levels. The pair seem to have failed in its first attempt to break a flag formation. The pair is moving in a downward sloping channel with support at 88.00 and resistance at 89.70. Expected to undergo consolidation phase between 88.00 & 90.00. Any breach of the range would lead to 100 pips move.

From a remittance perspective it would be prudent to book any outward remittances on slide towards 88.00 levels and the inward remittances by selling EUR currency against INR around 90.00 or higher if seen.

GBP/INR

The GBPINR currency pair is in a kind of consolidation mode with negative bias. It is moving in an upward channel. The pair has formed a bearish candle. Current exchange rate of GBPINR is 101.91. Likely range would be 100.70-102.70 with choppy moves on either side. It may be prudent to liquidate/hedge outward remittances on any slide towards 100.70 levels by buy GBP currency against INR. it is desirable to hedge inward remittances on any spike to 102.70 or higher levels if seen.

Any close outside the range of 100.70 & 102.70 might see 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 22.49. AEDINR pair mirrors the USDINR moves. The crucial resistance at 22.65 is holding 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 2.3754. Though the pair attempted 2.4200, it could not sustain and came under selling pressure. The momentum was such that the support at 2.4000 also gave way. The current levels are crucial and expect further decline if 2.3700 is taken-out. Expect a consolidation between 2.3500-2.3900. Only a break on either side would decide the direction and target.

The outward remittances can be hedged on any decline towards 2.3500 or lower if seen and inward remittances on any spike towards 2.3900.

CAD/INR

The current exchange rate of CAD/INR currency pair is 60.63. The pair posted 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 60.40-61.40.

With this back drop its wiser to hedge the inward remittances by selling CAD currency against INR on any spike closer to 61.40 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 foreign currency pair is 17.93. The currency pair was moving in a downward sloping channel and as an unusual case it broke the support and had a deeper sell-off. The pair has a crucial support at 17.75 and resistance at 18.20. Expect the base of 17.75 to hold and favour a consolidation between 17.75-18.20. Any break on either side would decide the direction and target. Preferable to hedge the commitments of outwards remittances on any decline towards 17.75 or lower if seen. Also suggested to hedge the inward remittance close to 18.20 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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