2023-07-03 06:27:11
USDINR: (Bias- Downward drift. Range- 82.00-82.20)
With the rise of Asian stock markets, mirroring the performance of the US markets on Friday, and the US Dollar Index facing pressure, we anticipate a decline in USDINR towards the 82.00 level in the current spot rate. USDINR has remained within a range of 81.85 to 82.20 over the past two weeks. The majority of trading activity has occurred between 81.90 and 82.10, a mere 20 paise difference. Historically, such significant compression in realised volatility has been followed by a temporary increase in the intraday range and even a short-term trending phase. If USDINR breaks the 81.85-82.20 range, it could initiate a move of 25/30 paise in that direction.
Implied volatilities for USDINR across various timeframes have reached unprecedented lows. The one-month volatility implies an average daily movement of 12/15 paise. Traders can continue focusing on scalping trades with target price movements of 4/7 paise within the day. Moreover, it may be worth considering the implementation of short straddle or short strangle strategies, although caution is advised. Due to the potential risk of significant losses resulting from an unexpected gap opening, it is advisable to maintain small position sizes.
GBPINR: (Bias- Range bound. Range- 103.95 – 104.30)
Throughout the latter half of June, both GBPUSD and GBPINR experienced a nearly 2% downward correction, possibly attributed to profit-taking. CFTC data suggests that speculators remain significantly bullish on GBPUSD, but the recent correction may have brought about a more balanced positioning.
In terms of macroeconomic news, UK business sentiment reached a new 13-month high in June. This finding follows a fifth consecutive monthly improvement in the widely monitored consumer confidence survey by GfK. With both consumers and businesses becoming more confident, traders are anticipating that the Bank of England (BOE) will display increased confidence in tightening rates further to address persistently high and stubborn inflation.
As a result, UK sovereign bond yields have surged to their highest levels since June 2008. The UK money market expects the BOE to raise rates by another 100 basis points to the 6.00% level. Consequently, we anticipate GBPINR to benefit from this hawkish expectation and trade with a positive bias throughout this week.
EURINR: (Bias- Downward drift. Range- 89.20-89.60)
US personal consumption expenditures rose 0.1% in the latest month, following a 0.4% increase in April. On an annual basis, it advanced by 3.8%, slightly slower than the previous month's revised 4.3%. Weaker-than-expected spending and a drop in the inflation gauge put pressure on the US Dollar, causing EURUSD to rise from 1.0840 to 1.0920. Speculators maintain a bullish stance on EURUSD, which may impede a rapid increase in EURUSD and EURINR prices. The projected range for spot prices is between 89.00 and 90.00.
JPYINR: (Bias- Downward. Range – 56.70-57.15)
The Tankan survey revealed an improvement in Japanese business sentiment during the second quarter, attributed to the peak in raw material costs and the easing of pandemic restrictions, which boosted consumption. Despite this positive sentiment, USDJPY continued to rise due to an increase in US bond yields and a risk-on sentiment prevailing in Asian financial markets. Consequently, JPYINR remains in a bearish trend, driven by the strength of USDJPY and the weakness of USDINR.
3.4K viewsAnindya Banerjee, edited 03:27
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