Yesterday, it was noted that Indian rupee strengthened against USD more than any other major currency. Similarly, the Sensex was also much better fate than the rest of other Asian counterparts on stock indices. However, surprising rise in risk sentiment today that propelled all major Asian stock indexes higher has failed to have a similar impact on Rupee and Sensex.
Time Table
To be fair, Rupee and Sensex only strengthened but whose degree is a shadow of what we saw yesterday. Both currency and stock index since given up much of their paltry earnings, with Sensex currently trades just 0.18% higher. Rupee was much darker; USD / INR is now trading higher than the closing level yesterday on the order of 61.33.
It is interesting to note that both currencies and Indian stocks were better than the rest one day, only to have both less effective the next. But this is the fickle nature of market sentiment when it is not supported by something fundamentally important. However, it does not really sound like bad news for either stock or buyers Rupee, the share price today is simply a return to the market average to make gains yesterday that neither deserve when they outperformed. This also means that USD / INR traders should not expect prices to shoot much higher from here.
Technicals are suitable, with stochastic readings may be in the overbought region should test the 61.55 price ceiling. As such, the highest probability is that prices remain under 61.55 and above 61.1 floor after the bearish rejection off 61.55 -. Assuming that the fundamentals remain as it is in the short term
Weekly Chart
long-term chart continues to promote weaker rupee in the coming weeks or months. Channel Top goal remains viable as long as price remains above 61.3. Stochastic readings agree with Stoch curve already close to the oversold region and may reverse quickly (maybe some candles which can means 1 or 2 months later). This also corresponds with the overall fundamental story of the Indian economy continues to remain low relative to the road of the US recovery - promoting more USD / INR in the long term. . Not that this is important in the short term but as there is no immediate threat of price break of the consolidation channel seen on the hourly chart
Links:
GBP / USD - 1.6450 resistance Grand Stands
AUD / USD - Trying to hold above 0.88
EUR / USD - settles around 1.3550
This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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