USD-INR TECHNICAL SNAPSHOT
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CONTENTS Fundamental Factors Technical View Moving average Fibonacci Retracement Pivot Point (Weekly & Daily) Daily & Weekly charts
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Fundamental Factors The Indian Rupee and S&P CNX Nifty witnessed their worst performing weeks in the last Q2FY12 on the back of negative global cues and various economic factors that investors discounted. One of the key driver was European debt crisis and Foreign institutional investors pulling the money out of the Indian market. The jitters of European debt crisis contagion and fear of it may spread to core markets and also speculation over debt fund and weak demand in U.S re-emerged later this week that led a downfall in the Rupee. In this case, it may further worsen due to which foreign institutional players are pulling money out of the Indian markets and other EM’s and invest in U.S treasuries due to which other Asian currencies has seen downfall as well. The other crucial factors were:The rupee ended near the 32-month low touched early on Tuesday as sharp losses in domestic shares, a weak euro and dollar demand from corporate and oil refiners weighed. Oil is India's biggest import item and oil refiners are the largest buyers of dollars in the local market. The oil prices have climbed to $100 in the past 6 weeks and it may further extend its rally. Internal issues are more pressurizing rupee as Higher interest rates in the economy coupled with rising inflation is a disinter for Indian economy and it is seen to end nowhere in the near term. The rupee is already the worst-performing Asian currency, weakening by more than 13% from its strongest point in late July. It is down nearly 12% so far in the calendar year. Though RBI has been asked to intervene to appreciate rupee and it has also asked central banks to liquidate Dollars though rising demand from Importers and Banks is still a major concern.
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TECHNICAL VIEW Moving averages Moving Averages
20 Day
50 Day
100 Day
200 Day
Daily
49.6720
49.1402
47.0891
45.9407
Weekly
47.1965
45.8366
45.7558
-
Fibonacci retracement levels (Weekly) SCRIPT
0.0%
23.6%
38.2%
50.0%
61.8%
100.0%
161.8%
261.8%
USD/INR
43.8600
45.7278
46.9544
47.9405
489266
53.1300
57.1959
65.6644
R1
P
Weekly Pivot SCRIPT
R4
R3
R2
S1
S2
S3
S4
USD/INR 55.3967 53.8767 52.3567 51.7933 50.8367 50.2733 49.3167 47.7967 46.2767
Daily Pivot SCRIPT
R4
R3
R2
R1
P
S1
S2
S3
S4
USD/INR 53.0767 52.4267 51.7767 51.5033 51.1267 50.8533 50.4767 49.8267 49.1767
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Daily & Weekly Chart of USD/INR
Daily Analysis On the Daily Chart of USD/INR, it has made a long formation of descending triangle making lower highs and same lows while it has made a solid double bottom formation at the level of 43.900/86 in April 2011. It has made a upward break out of the descending triangle in August 2011 and it has now made a fresh 32 month high of 51.4000 and ended the week on a strong note at 51.2300. It has also made a flag pattern n the daily chart recently in a upward trend. Flag pattern is a continuation pattern and it may continue uptrend in the near term as it has made a break out of the flag pattern. The near term resistance for USD/INR will be 52.0100 and its all time high of 52.1300; breaking of which may see a rally of 2-3% in coming weeks.
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Weekly Analysis
Weekly Analysis The mounting fears of European debt crisis, higher interest rates, rising inflation and Foreign institutional players pulling their money out of the sysytem amid rising demand from banks and importers for Dollar are some fundamental factors behing uptrend in USD/INR. On the weekly Chart of USD/INR , It has been in downtrend for the past two years making lower highs and lower lows and it has formed double bottom at 43.86/90 level in the past one year converting downtrend into a descending triangle. we can see it is working well with its retracement of fall from 53.1000 to 4.86 level and recently made a upward break out of his triangle and rallied to 32 month high of 51.4000. From here if we see the next retracement level for USD/INR; it comes at 100% i.e its all time high of 52.1300 and then fibbonacci retracement level 161.8% level will be next resistance which comes at 57.1959 and 261.8% coming at 65.6644.
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