Thursday, September 15, 2016

Will Rupee - USDINR reverse back to 69? Impact on Stock Market?

Understanding impact of USDINR on stock market along with Elliott wave counts and inter-market analysis.

During the crucial juncture it becomes important to look at different asset classes such as USDINR and Indian Equity Markets which has high correlation during reversals. This correlation differs in magnitude but it can provide clues for the change in trend.

Understanding Correlation: Post making high at 8968 level, Nifty has showed sharp fall towards 8688 level and that too with big Gap down opening of more than 120 points on 12th September 2016. On the other side USDINR has reversed from the important support of 66 and moved higher towards 67.10 level. In the month of February 2016Nifty made bottom at 6825 level whereas USDINR made top at 68.88 level. So, crucial areas are associated with reversal in close vicinity in both of these assets.

Is recent reversal in USDINR signaling towards important top in Equity Markets?

Apart from Correlation it also becomes vital to analyze the individual assets applying Elliott wave counts which can provide clue for the next move. Below we have shown daily chart of USDINR taken from “The Forex Waves Short Term Update”.

USDINR Daily chart spot:

(Part of research taken from 12th September 2016)

Wave Analysis:

In the last trading session USDINR bounced back and broke the pivot resistance of 66.80 (fut) levels suggesting that bulls are coming in action since a couple of days.

The daily chart of USDINR shows that currently wave…. is ongoing which is subdividing further but still the previous pivot low of 66.00 (fut) levels is intact. From medium term perspective only a move below the same will result into deeper correction in the form of wave iv. However looking at the smaller picture we can get a clear indication of the ongoing trend.

It seems that the action is this currency pair is about to start and we can see movement back above the channel. Reversal in currency along with Equities cannot be mere coincidence as we have seen this happening many times before as well.

Keeping a tab on cross assets can sometime provide vital clues for equity markets. To know where is Nifty headed along with currency outlook get access to “The Financial Waves short term update” along with “The Forex Waves Short Term Update”which covers USDINR, EURINR, JPYINR and GBPINR with important levels.

We have managed to achieve 100% success ratio in our Currency calls for month of August. This simply shows it is possible to trade Forex even when there are external interventions. Technical analysis is all about probability and there is no guarantee of such performance in future. Nevertheless, we thrive towards achieving the best possible risk reward and trading tips based on technical analysis and Elliott wave. For subscription to Trading tips along with research reports visit Pricing Page or Contact US for more details.

No comments:

Post a Comment