Indian Rupee (usd/inr) short term view: 23rd February 2020

By: Admin
26890

Insignia Consultants

New Delhi

Sunday, 23 February 2020

3:43 pm IST

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Indian Rupee short term view

Asian currencies weakened sharply on Friday. India was closed was Friday. Rupee broke past 72.0000 against the US dollar on Friday in Newyork. There will be short covering if rupee weakens by more than thirty paisa and also trades over 72.0000 till Wednesday. I am more concerned by corporate debt demand. A lot of knock out options will be triggered if the rupee weakens against the US dollar this week. Only if exporters sell aggressively and/or RBI intervenes that rupee will gain this week. The culprit for rupee and Asian currencies is the global spread of corona virus and nothing else. If crude oil falls sharply the weakness will be short lived.

Importers and payers will need to wait till Monday after noon and then decide on hedging strategy. They should not panic at Monday opening weakness (if any).

Exporters should use any big weakness of sixty paisa and more to sell far forward. (three months and more). Use trailing stop loss for weekly receivables.

Every news is rupee positive BUT for corona virus impact. If the corona virus global spread continues on or after 18th March, the world will see a sustained bout of stagflation. Global stagflation situation (if any) can result in rupee breaking past 75.0000 in April.

  1. US DOLLAR-INDIAN RUPEE (USD/INR): Friday’s close Rs.71.8800
  • Key weekly resistance is at 72.2625. Only a break of 72.2625 will result in 72.6425 and 71.9125.
  • Key long term resistance is at 72.8950. As long as rupee does not break 72.8950, upside will be limited in the short term. Chances of a fall to 70.5800 and below will be there if rupee does not break and trade over 72.8950 in the next two weeks.
  • Usd/inr needs to trade over 72.8950 for two consecutive days to rise to 73.9425 and 74.5000
  • Crash or bearish trend will be there if rupee does not break 72.4200 this week to 71.1175.
  • Trend from Wednesday will be the key.

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. All analyses used herein are subjective opinions of the author and should not be considered as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading. Websitewww.insigniaconsultants.in. Prepared by Chintan Karnani

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