Past week saw a dramatic shift of stance. Aided by the buoyant mood after India achieved a
successful soft landing on the moon, the market witnessed a sharp sell-off towards 82.35. It appeared
as if the markets were betting on another failed mission or the previous trigger past 83.30 was a false
break. However, the buying interest continues as the market is still not sure of a decline below 82.20.
It is evident from the market action that the declines are used as opportunity to hedge the Imports.
Expect the range of 82.20-82.90 to hold for the week and 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:
As noted in the previous blog, continue to keep the following input for quick reference.
- The 82.75-83.25(with error adjustments) zone is the Fib projection of July 2011 to July
- Alternatively, the Fib projection of the move from Jan 22(Low) to Oct 22(High) and
Nov 22 low also suggest the projection as 82.92. Hence, the importance. If breached, we
may see another spike towards 85.70. With last week’s move we are back in the same
trading range of 82.20-82.90
- Neither the moves in Dollar Index-DXY nor the equity have direct correlation
- A decisive week ahead as the monthly closing candle could give further clues for future
direction and the target.