WEEKLY FOREX HEDGING GUIDE 14 th Oct 2013

Transcription

1 WEEKLY FREX HEDGING GUIDE 14 th ct 2013 USD / INR Bullish USDINR - INDIAN RUEE (61.00, ,.90, , ) Relative Strength Index ( ) 2009 M A M J J A S N D 2010 M A M J J A S N D 2011 M A M J J A S N D 2012 M A M J J A S N D 2013 M A M J J A S N D V Last week, it opened at 61.00, high / low at /.90, and closed at as against earlier week's closing at Last week, we were of the view that if the currency manages to move above 62, the levels of / may be achieved; but in case, it moves below convincingly, the levels up to.25 may also be seen. The critical support level was indicated to be 3QMA (presently at 61.03). Importers were accordingly advised to settle short term payables at market and hedge part of medium term payables at current levels; balance medium term payables / full long term payables were advised to be left open. During the week, after opening at 61., the currency went up to (very near to our 1 st target of 62.35) and then after profit booking, went down to.95 and finally closed at as against last week s close of The Currency is well supported by 3QMA (presently at 61.03). The Crossover signal on daily chart is continuously running negative since 9 th Sept; though it is yet to give negative signal on weekly chart. The next major support for the currency lies at (21WMA).54 / The

2 WEEKLY FREX HEDGING GUIDE 14 th ct 2013 resistances to be watched should be around (3WMA) / (5MMA) / (5WMA) / (21DMA) / (DMA). Five weeks ago, we had given a matrix of behaviour of the currency during last 5½ years and on the basis of past depreciation / appreciation, probable bottom targets for USD/ INR were extrapolated to be These targets were expected to be achieved during next six months. ut of this, first target of has been achieved during the week ending 4 th ct 13. Going Forward, the currency is likely to move in a range of next week. nly on crossing 62.25, move towards is likely to materialize. Importers are advised to continue settling short term payables at market rates. Medium term payables may also be hedged at current levels. Long term payables may still be left open. l note that we have been advising to continue leaving Long term payables open since 15 th Sept 13 onwards in view of signals on monthly & quarterly charts indicating trend reversal for the currency from up to down. Exporters are advised to settle short term receivables at market rates. Hedging for medium term receivables may be started, once retracement starts and rate starts moving above 62. This policy shall be reviewed next week. Major Resistances : 61. / / Major Supports :.90 /.55 / 59.95

3 WEEKLY FREX HEDGING GUIDE 14 th ct 2013 EUR / INR EURINR - 1 MNTH ( , , , , ) Relative Strength Index ( ) 2010 A M J J A S N D 2011 M A M J J A S N D 2012 M A M J J A S N D 2013 M A M J J A S N D Last week, it opened at , high / low at / , and closed at as against earlier week's closing at Last week, it was expected that there may be range bound movements within and future trend to be clear on breaching of these levels on either side. We had also indicated earlier that medium term view is bearish in view of preliminary reversal signals visible on monthly charts. Importers were accordingly advised to settle short term payables at market rates and to postpone hedging of medium term & long term payables to be done later on at lower levels. During the week, after opening at on 7 th, it went up to on 9 th.. It breached decisively on 11 th and went down to and finally closed at The currency has now closed below 13WMA (83.35) after May 13 and also breached DMA (84.65) this week confirming downtrend. It has taken support slightly above 3QMA (82.15) and reversed there from and closed just above 5MMA (83.12). The next crucial support exists at 21WMA (80.) and on its breaching, the next level exists at (30WMA). The Crossover signal on daily chart is still running negative (from 10 th Sept), however it is yet to give reversal signal on weekly chart. Going forward, if (5MMA) is decisively broken, the currency may attempt to move towards (3QMA). However, in case it is also broken, the next major support is (though quite far) around 80.. Around this level, % retracement would also be completed and hence ample support is likely to come over there. Importers are advised to continue settling short term payables at market rates. Hedging of part of medium term payables may be done, once it reaches around Balance medium term & full long term payables may still be postponed for hedging later on at lower levels. Exporters should settle short term receivables at market rates. Any uptick around 85 may be utilized for hedging medium term and long term receivables. Major Resistances: / 84. / Major Supports: / / 81.25

4 WEEKLY FREX HEDGING GUIDE 14 th ct 2013 GB / INR GBINR - 1 MNTH ( , , , , ) Relative Strength Index (.94) 2010 A M J J A S N D 2011 M A M J J A S N D 2012 M A M J J A S N D 2013 M A M J J A S N D Last week, it opened at , high / low at / and closed at as against earlier week's closing at Last week, it was expected that there may be some more weakness towards , from where a technical bounce may materialize; however, caution was advised at higher levels, in view of possibility of further lower levels in short to medium term. We had earlier informed about visibility of exhaustion signals on monthly charts. Importers were accordingly advised to cover short term payables and part of medium term payables around current levels; balance medium term & full long term payables were advised to be left open. During the week, after opening at , it went up to on 9 th, from where it came down to and finally closed at It has taken support around 13WMA (97.85) and closed below DMA (presently at 99.61). The closing is still above 5MMA (97.44) / 3QMA (96.97). The major support exists at (21WMA). Going forward, weakness may continue and once 97 is broken decisively, levels of 96 / 55 may also be likely. However, once it happens, one has to be careful, as sharp bounce may be expected there from. Importers should settle short term payables at market rates. art of medium term payables may be hedged around current levels. Balance medium term & full long term payables may still be left open to be covered at further lower levels (within 97 95). Exporters should settle short term receivables at market rates. art of medium term payables may be hedged around current levels. Hedging of balance of medium term and full long term receivables may be postponed for hedging above 100. Major Resistances : / 99. / Major Supports: / / 95.00

5 WEEKLY FREX HEDGING GUIDE 14 th ct 2013 EUR / USD EURUSD (1.3555, 1.37, , , ) Bearish Relative Strength Index (61.45) 2009 M A M J J A S N D 2010 M A M J J A S N D 2011 M A M J J A S N D 2012 M A M J J A S N D 2013 M A M J J A S N D X Last week, it opened at , high / low at 1.37 / , and closed at as against earlier week's closing at Last week, we had advised to be cautious and indicated that once the Cross moves below on closing basis, lower levels may be seen with the supports coming around 1.34 / We had also indicated that the daily indicators had started to give exhaustion signals, though weekly and monthly indicators along with Crossover signal still remain bullish; and which indicates that there may be corrections in the short term, but buying at lower levels is likely to emerge. During the week, after opening at , the Cross went down to (nearer to our 1 st support level of 1.34) on 9 th and after recovering to , closed on 11 th at During the week, the Cross had taken support at 21DMA. We should closely watch 3WMA (1.3539) and 5WMA (1.3486), as once 3WMA goes below 5WMA, lower levels would be possible. Further, as the monthly averages are not in phase, there will be probability of correction from higher levels (say from above ). Going forward, once the Cross moves below decisively, lower levels may be seen with the supports coming around 1.34 / Major Resistances : / / 1.36 Major Supports : 1.30 / 1.34 /

6 WEEKLY FREX HEDGING GUIDE 14 th ct 2013 GB / USD Bearish GBUSD (1.17, , , , ) Relative Strength Index ( ) M A M J J A S N D 2010 M A M J J A S N D 2011 A M J J A S N D 2012 M A M J J A S N D 2013 M A M J J A S N D X Last week, it opened at 1.17, high / low at / , and closed at as against last week s closing at Last week, it was opined that the Cross should take support around 21DMA (1.5980) and then range bound movements may be expected within During the week, the Cross opened at 1.17, went up to , and then because of profit booking, it went down to and finally closed at This week, it has closed below 21DMA (presently at 1.45). Closing is also below 3WMA (1.32) and 5WMA (1.5995) and once 3WMA goes below 5WMA, further lower levels should be seen. Going forward, the Cross is expected to be range bound within Major Resistances : / 1. / Major Supports : / / Note: All the above rates are from Meta Stock DISCLAIMER: The opinion expressed in this column is based on technical analysis. There is risk of loss in trading, as markets get affected by multiple factors, which cannot be fully accounted for in preparation of the above opinion. The contents are for academic circulation only. Those following the above do so at their own risk. Any recommendation does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any currency / cross. ne should fully understand risks in trading of currency / cross before trading.