Currency Views for the Week 23 Jan – 27 Jan 2023



 USD/INR

The pair came under continued selling pressure. While the pair attempted to scale higher of 81.88 levels, it got sold-off again. The crucial support at 81.10 also gave up. The momentum is likely to continue and any pull back towards the trend line resistance at 81.80 and 82.20 is likely to see selling pressure. Break below 80.90 can trigger further stops being hit to see the pair drift towards 80.50 and then to 80.20. Most likely scenario would be a consolidation between 80.20 and 81.50. A close outside this range requires re-assessment of risk/direction and target.

A few more observations:

· Steep trend line broken

· The correlation between DXY and USDINR is not currently active and any spike in DXY need not necessarily impact this pair

· though the Dollar Index-DXY is likely to hover in the familiar range of 102-105

· The raising upward channel indicate the broader range of 80.10-83.10

· The increased volatility and wild swings likely to continue

With this back drop it would be preferable to hedge the outward remittances on decline towards 80.20 or lower if seen. Current exchange rate of USD/INR is 80.97.

 

AED/INR

The current exchange rate of AEDINR is 22.05. AEDINR pair mirrors the USDINR moves. The foreign currency pair has breached an upward sloping trend line starting Jan 22. For now, the pair is expected to consolidate between 21.90 and 22.40. We may have to watch for breach on either side for a new 30 pips range. With this theme in mind the outward remittances may be hedged at the current levels or on any decline towards 21.90. A daily close below 21,90 is expected to make the pair vulnerable for further decline towards 21.50.

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