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  3. Forex pair update for the week 31 to 04 August 2023

Forex pair update for the week 31 to 04 August 2023

USD/INR

Past week saw another rare attempt of 81.67. However, the market witnessed a strong buying interest and the pair swiftly rose to 82.33 and finally settled at 82.20. As observed in the previous Blogs, it is evident from the market action that the declines are used as opportunity to hedge the Imports. Markets would be confused on the logic of this magic number 81.70 which has been holding since Feb 23 except for a marginal breach in March & April 23. It is evident from the charts that if 81.70 is breached on weekly closing basis there are possibilities of lower levels towards 81.55 and then 81.15 and even 80. Having made failed attempts, we may expect a consolidation between 81.75 and 82.55. 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:

  • Neither the moves in Dollar Index-DXY nor the equity have direct correlation.
  • A deeper correction is long overdue. Market is expecting 81.70-83.10 will be protected. If appears that the same kind of yo-yo moves may continue till one more quarter if we do not see a close below 81.70.
  • 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.
  • A decisive week ahead. Last week there was a breach of the support at the base of the triangle. Yet there has been sharp recovery to be back inside the triangle.
  • The narrowing of the Bollinger Bands suggest we can expect sharp moves sooner. 85+ or 80- is a strange puzzle.

With this back drop it would be preferable to hedge the outward remittances on decline towards 81.75 or lower if seen. Current foreign currency rate of USD/INR is 81.98.

EUR/INR

Current EURINR exchange rate is 91.17. The Currency pair continued to be under selling pressure. The currency pair posted a bearish candle for the second week in a row. This may be a reactive move after the strong up move of earlier week. The pair may find good support at the lower end of the channel at 89.70 and may face stiff resistance around the midpoint of the channel at 91.30 and subsequently at the top of the channel at 92.80. Expected to undergo consolidation phase between 89.70 & 91.70. 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 89.70 levels and the inward remittances by selling EUR currency against INR around 91.70 or higher if seen.

GBP/INR

The GBP\INR currency pair partially recovered the losses made during the past week and has closed at the middle of the range and made a bullish candle. The current exchange rate of GBPINR is 105.74. The pair is back into the ascending channel with support at 103.77 and resistance at 109.00. The currency pair is expected to move in a range of 104.10 & 108.50. It may be prudent to liquidate/hedge inward remittances on any upticks towards 107.75 levels by selling GBP currency against INR.

it is desirable to hedge outward remittances on any decline towards 104.10 or lower if seen. Any close outside the range of 104.10-107.75 might require re-assessment of risk.

AED/INR

The current exchange rate of AEDINR is 22.39. The AED being pegged currency, AEDINR pair follows the USDINR moves. For now, the pair is expected to consolidate between 22.25 and 22.55. 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 22.25. A daily close below 22,25 would make the pair vulnerable for further decline towards 21.90.

THB/INR

The current Exchange rate of THB currency against INR is at 2.4000. The pair is into a consolidation move retaining the gains. The pair has made a near tweezer bottom around 2.3650 and the expected range for the week is 2.3810-2.4350. Any close outside the range to be assessed a fresh for direction and target.

The outward remittances can be hedged on any decline towards 2.3810 or lower if seen and inward remittances on any spike towards 2.4350.

CAD/INR

The current exchange rate of CAD/INR currency pair is 62.06. The pair seem to have strong barrier at 62.60. The pair continues to move in an upward channel with support at 61.27 and resistance at 62.87. The range expected for the current week is in a band of 61.60-62.60.

With this back drop its wiser to hedge the inward remittances by selling CAD currency against INR on any spike closer to 62.60 or above and hedge the outward remittances by buying CAD currency on any decline closer to the lower end of the range.

MYR/INR

The MYRINR currency pair continues to find resistance at 18.20. Current exchange rate of CADINR currency pair is 18.05. Any retracement will be treated as opportunity to buy. Expected range for the week is 17.90-18.35. Preferable to hedge the commitments of outwards remittances on any decline towards 17.90. This currency pair is known for its characteristic move of alternate bullish and bearish candles. Hence, suggested to hedge the inward remittance close to 18.35 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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