Indian equity market – Nifty and currency – USDINR follow their own independent paths but at major turning points these market turns together infact there are times when these markets turn exactly on the same very hour of the day. The magnitude after the turn might vary but the correlations are very high at inflection points.
The below chart clearly shows how at each turning point both markets turned exactly on same day…
As shown above an upmove in equity market is associated with down move in Indian currency USDINR and vice-versa. Lately, on 5th October 2012 Nifty turned down after making at high at 5815 and at same very hour USDINR turned higher after making a low of 51.50.
It is therefore important to see both the markets together that can give high conviction trades. Normally people use indicators like RSI, MACD, ROC to derive secondary confirmation but it is sometimes useful to think out of the box and use different asset class like Currency market to derive high conviction view on Equity….
To know what is next for Nifty and USDINR subscribe to the combine package of Equity and Currency report today and avail 50% off. Write to us on helpdesk@wavesstrategy.com for more information or call on +91 9920422202 or visit www.wavesstrategy.com
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