Posts

USD/INR (U.S. DOLLAR/INDIAN RUPEE)

/0 Comments/in , /by

Thanks to the Central Banks and the decision to delay rate hikes by FED, both emerging market equities and currencies had a strong rally in March. Latest recovery in equities and currencies pulled several emerging market FX to strong support levels. Such that, these are critical inflection points worth mentioning.

US Dollar / Indian Rupee weekly price chart

US Dollar / Indian Rupee weekly price chart

USD/INR (U.S. Dollar/Indian Rupee), pulled back from its historical high level at 68.80 to the lower boundary of its 2 year-long trend channel at 66 levels. Lower boundary of the 2 year-long trend channel is also the 200-day exponential moving average, in other words a strong support.

On the daily chart we can also see that MACD, a momentum indicator, reached oversold levels, though not on a buy signal yet. All these technical information suggest that unless there is a decisive breakdown below 66 levels, Indian Rupee is likely to weaken in the following weeks. In case of a rebound from the 200 day average and the lower boundary of the 2 year-long trend channel, the new trading range will be 66 and 69.

USDINR III

U.S. Dollar / Indian Rupee daily price chart

U.S. DOLLAR/INDIAN RUPEE

/0 Comments/in , /by

Emerging market currencies had a relief rally over the past month. U.S. dollar weakened against most of the emerging market currencies with the expectation of a possible delay on FED rate hike. Counter-trend moves in the emerging market currencies might be over and we can see another phase of weakness. An important EM cross-rate is the U.S.Dollar/Indian Rupee. Once again the cross-rate pulled back to its 2 year-long trend line support. Both the 2 year-long trend line and the 100-day moving average form support between 64.50 and 64.80. Given the oversold condition on MACD, we can expect a possible rebound from the long-term support area resulting in Indian Rupee weakness.

In the case of a breakdown below 64.50 levels we will expect Rupee to gain strength and possibly reverse the 2 year-long trend.

USDINR

US DOLLAR/INDIAN RUPEE

/0 Comments/in , /by

China devalued its currency. This opened the door for further depreciation for the Chinese Yuan and also for currency wars between the Asian economies. Over the past two years emerging market currencies have performed poorly against the U.S. dollar. Weakness was mainly driven by commodity exporters. Now, strong U.S. dollar, weak emerging market currencies trend is spreading to Asia.

USDCNY

U.S. Dollar/Indian Rupee is preparing for a strong breakout from its 3 month-long consolidation range (rectangle chart pattern). On a larger scale, USD/INR formed a head and shoulder pattern. Both chart developments suggest weakness for Indian Rupee if the cross-rate clears 64.4 levels in the following days.

USDINR

Another weakening Asian currency is the Philippines Peso. Over the past two years, USD/PHP has been resilient though, following the breakout from its symmetrical triangle Peso has also started depreciating against the U.S. dollar.

USDPHP

INDIA BSE SENSEX INDEX

/1 Comment/in , , /by

Uptrend in INDIA equities is running out of steam. Chart pattern suggests correction in the coming months if the index breaks down the 200-day exponential moving average at 27,300 levels. India BSE SENSEX index might be forming a head and shoulder top chart pattern with the neckline overlapping with the long-term average. Breakdown below a strong technical level like this could be the first warning signal of a deeper correction.

INDIA BSE SENSEX INDEX

Weekly price scale

INDIA BSE SENSEX INDEX II

Daily price scale

Similarly USD/INR formed an inverse head and shoulder chart pattern suggesting weak Rupee if the cross rate breaks above 63.70 levels. I’m still bullish on India in the long-term (you can find earlier analysis here at the time of long-term breakout). BSE SENSEX cleared long-term horizontal resistance at 21,200 levels in 2014. I’ll view the possible weakness as a pullback to the long-term support level.

USDINR

Some stocks that are showing weakness in the Index. Strong long-term trend lines are being challenged. Breakdown on these names can push the SENSEX lower.

BAJAJ AUTO

TATA MOTORS

ICICI BANK

WIPRO

REAL, RUBLE and RUPEE

/0 Comments/in , /by

Here are some of the emerging market currencies that I see vulnerable against the U.S. dollar in the medium/long-term. U.S. dollar had a strong rally against major cross rates and most of the emerging market currencies. In the short-term we might be due for a pull-back and some weakness for the U.S. dollar but in the medium/long-term we should keep a close eye on these EM currencies.

Brazilian real is weakening towards 2.45 levels. Last one years’ move formed a sideways consolidation. Breakout above 2.45 will be negative for BRL.

USDBRL

I drew attention to the earlier breakout on the Peruvian Nuevo Sol. This was a nice ascending triangle with the resistance at 2.82. Resistance becomes the new support.

USDPEN

Indonesian Rupiah is forming a consolidation right below the decade-long horizontal resistance. Breakout above 12,400 will cause long-term damage on this cross-rate.

USDIDR

Indian Rupee  held above the 3 year-long trend line. This shows that the uptrend is still intact. Unless we see USD/INR establishing a move below its 200-day average, I would favor USD against the Indian Rupee.

USDINR

Russian Ruble continues its slide against the U.S. dollar. Resistance at 36.50 became support. Unless price falls below 36.50, this chart is poised for higher levels.

USDRUB

INDIA BSE SENSEX and USD/INR

/0 Comments/in , , /by

INDIA BSE SENSEX INDEX

Strong price action should be followed by a decisive breakout on the BSE Sensex Index. Since 2007, Sensex tested 21,250 levels for three times and over the past few months price action suggests a breakout to all time highs is very likely. Confirmation of the breakout should come after a decisive weekly closing above the strong resistance at 21,250 levels. 200-day moving average should act as medium-term support at 20,000 levels if the index fails to clear the strong resistance. Breakout above 21,250 levels will push the index towards 25,000 levels in a short period of time.

USDINR

Indian rupee gained strength against the U.S. dollar and this trend is likely to continue towards 58-60 area. Strong equity market should bode well for the local currency.

USD/INR & USD/TRY

/0 Comments/in , /by

Earlier in May I’ve updated two charts on the emerging market currencies USD/INR (Indian Rupee) and USD/TRY (Turkish Lira). Both suggested strong USD in the short/medium-term. We are seeing clear breakouts from consolidation ranges and weakness in major emerging market currencies.

USDINR III

USDTRY II