Welcome to today’s daily report on the performance of the Indian Rupee (INR) in various currency exchange segments. In this report, we will analyze the opening and closing rates of the INR against four major currencies, namely the Euro (EUR), British Pound (GBP), Japanese Yen (JPY), and United States Dollar (USD).
Date: July 10, 2023
Place: New Delhi, India
By examining these rates, we aim to provide valuable insights into the trends and fluctuations of the INR in the global foreign exchange market. Let’s look at each segment to gain a deeper understanding of the rupee’s performance.
One could argue that the essence of understanding patterns is similar to the learning process itself, through continuous absorption, application, and revision. Take, for example, the consistent pattern that has existed in USDINR for the past ten months, much like a recurring lesson in a course syllabus. Just as we’ve witnessed before, it’s again preparing to pull back from around the 83.00 marker. An intriguing inquiry is whether it could retrace around 70/80% of the previous week’s movement. Achieving this would be akin to completing a critical unit in a course, and it would potentially cover the price discrepancies between 82.20 to 82.70 in the spot market. This is not unlike how gaps in a student’s understanding can be filled when they are provided with a range of related information.
Just recently, akin to receiving a report card, the US NFP report was released, showing the US economy added 209,000 jobs, which was not up to the anticipated figures. As a consequence, the US Dollar Index, showing signs of weakness, was quickly offloaded, similar to students changing their study strategy after an unsatisfactory grade. This report was mixed, akin to varied results across different subjects. Private sector job growth was the slowest since December 2020, yet wage growth remained steady at 4.4%, and the unemployment rate fell to 3.6%. It did not shift the perception that the Federal Reserve will likely increase interest rates by 25 basis points in their next meeting, similar to how a single report card may not change the overall academic trajectory.
Aspiring USDINR traders could focus on learning and applying scalping strategies via options and futures. Option scalping, striving for minor increments, is becoming increasingly popular in both the currency and equity derivatives market. Given the reduced trading costs, even small price fluctuations can be profitable, encouraging a high volume of options trading. This is not unlike how even small bits of knowledge can lead to a meaningful understanding of a subject. In these scenarios, buyers often take the lead over sellers. Similar to limiting study time to specific subjects while maximizing learning, Intraday options buying allows for large positions with limited capital investment. Just as disciplined students allocate specific hours for study and relaxation, disciplined scalpers implement stop-loss orders of 1-2 paise, aiming to gain between one tick to 4 paise per trade, and they engage with the market several times during the day.
The recent robust rally in GBPUSD is analogous to a student’s stellar performance on a recent examination. This performance has led to a positive start for GBPINR. GBPINR’s spot and front-month futures are currently at their highest level since 2013. While the bias remains upward, it is advisable to wait for a price retracement to establish a clear pattern, just as a student should review and understand their performance pattern before strategizing for future exams. Day traders continue to show interest in GBPINR options on NSE due to their attractiveness in high volatility, just as students show a keen interest in challenging subjects. For the day, the key support levels are around 105.70 and 105.50 on GBPINR July futures, similar to a student’s minimum grade goal, while the resistance levels, akin to aspirational targets, are expected to be around 106.05 and 106.20.
The relatively disappointing US jobs report released last Friday evening had an interesting effect on the EURUSD, which increased, and this was mirrored in the EURINR. In the forthcoming trading sessions, it is projected that EURUSD will surrender some of these gains. Thus, it is recommended for traders to first identify key support and resistance levels before embarking on new EURINR trades, much like students preparing for an exam by understanding the critical chapters. In the short term, the significant support levels for EURINR are set at 90.40 and 90.10, while the resistance levels are expected to be around 90.75 and 91.00.
The interplay between different currency pairs can often mirror the interconnectedness of subjects in a curriculum. For instance, the USDJPY experienced a drop as a result of a dip in the US Dollar Index, while concurrently, JPYINR saw an increase. Over the coming week, the USDJPY is predicted to remain within a limited range, akin to focusing on a specific topic within a subject, as we await the release of the US CPI report. As a result, the movement of JPYINR is likely to be majorly impacted by the fluctuations in USDINR. Anticipated support levels are around 57.90 and 57.65, while resistance levels are expected near 58.20 and 58.45 in July futures.
The information provided in this post by CurrencyVeda is intended for educational purposes only. It does not constitute financial advice and should not be used as a basis for any investment decisions. Always conduct your research or consult with a financial advisor before making any investment decisions.