Tuesday, December 27, 2011


■ USD-INR Weakness creeps in

The USD-INR touched the upper end of the long-term rising  channel and sold off sharply. For the week it formed a  candle with a long wick on the upside. The weekly  momentum indicator is showing a negative divergence in  the overbought territory. Hence the high of Rs54.32  becomes a key resistance. As long as that holds on a closing  basis the price can fall down towards the 21-daily  exponential moving average (DEMA), which is near the  50% retracement mark, ie Rs49.

■ GBP-INR: Channel resistances
The GBP-INR halted at the upper end of the long-term falling channel. In terms of Fibonacci retracement the 78.6% retracement mark turned out to be a crucial hurdle. The upper end of the short-term rising channel added to the downward pressure. As a result, the GBP-INR formed an inverted hammer on the weekly chart. Unless the level of Rs84 is surpassed it is expected to trade with a bearish bias. The targets on the downside are at Rs77-74 levels.

■ EUR-INR: Pressure builds in
The EUR-INR made a throw over the rising channel and entered back into it. It faced resistance at the all-time high of Rs71.31, which can potentially result in a double top. At the upper end of the channel, the price formed a bearish outside bar. The momentum indicator is showing negative divergence and has given a sell signal. On the downside, the channel target is Rs65, ie the lower end of the channel, whereas the weekly lower Bollinger Band and the monthly middle Bollinger Band are near Rs64.

To read the full report: CURRENCY UPDATES