Nifty Weekly Update and USDINR breaks out

Published: Mon, 08/13/18

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This is starting off to be a crazy week already in the Markets and to Get right into it I hope you have already listened to my weekend Podcast, if not go here now https://soundcloud.com/indiacharts/breakouts-and-breakdowns

If you heard it then I focussed a lot on the Currency turmoil in emerging markets. But is it a currency crash or a currency war? If you missed the answer from RBI on Policy day, that one of the reasons for his rate hike was the risk of a ''currency war'', then it was a pointer. That was followed by the break in EM currencies seen on the chart below. Note wave 3 took 7 weeks [not 2-err]

And that has been followed by a new low in the INR meaning a new high in the USDINR this morning. Not just a new high but a record with a massive Gap up. the chart below speaks for itself. The question I am asking is, does this sound like good news? This is a breakout and a sign that something has changed. The only time a currency crashes and equities rise in happiness is a hyperinflationary event. I do hope the government does not let that happen, as the implications for Indians at large and the following chaos are not what you want to deal with.It would be silly to let it happen knowing the risks on the table. If not then it means pain for the equity markets till the situation stabilises.

If you are an Indiacharts Insider you were not surprised by the move up in the USDINR because we were on top of it in all the previous posts below over the last one month.

USDINR

USDINR has been quiet but has twice before taken support at the 40dema/band and that is close to 68. so we should be close to a bottom and rally again for the pair unless something changes in price behaviour.

usdinr 180718

USDINR

It has been a long wait for USDINR to take off but it has been holding its support levels pretty well. The next move could get it past the 70 mark. This is the chart of the NSE futures, and the green indicator below is the Open Interest. Usually Open Interest drops off after expiration and after a big rise, but this time it has been sticky holding onto a much higher base level. Volumes have been good but still not back to 2013 levels.

usdinr 190718

USDINR

USDINR is back above the 20dma and taken support at the 20dma at 68.65, and as long as we are closing above it we are heading higher. While 3=1 points to 70.75 next the extentions within wave 3 mean that it could extend more. We will be able to update levels once the subdivisions become clear, but till a 5 wave rise within wave 3 is not done the move up is not over, so far we are in iii of iii up now.

usdinr 240718

USDINR

USDINR - has been consolidating at a higher level. No major move occurred after the new high. Support is at 68.30. The next move when it starts should take us beyond the 70 level.

usdinr 310718

Lastly let me leave you with my weekly note on Nifty

13 AUGUST 2018

The weekly Elliott Wave commentary with Targets and levels is published every Sunday to Subscribers, This is only an excerpt of our observations from recent publications.

MEDIUM TERM

NIFTY ELLIOTT WAVE UPDATE

Nifty moved from the lower channel line to the upper channel line. I have kept the upper channel line to the 02 May high and not the spike on 15 May. Then we have good touchpoints. Now if prices cannot get past the upper channel logically they go back to the lower end of the channel. You can argue that they will consolidate and continue higher but... READ MORE

nifty 130818

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Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
future probable outcomes. It is our endeavor to discuss high probability outcomes for
traders and investors. However this is not a solicitation to buy or sell stocks futures or
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knowledge and the help of a qualified investment adviser. Stocks based on the Elliott
wave model are based on the Fibonacci fractal of the market and momentum indicators,
targets are based on Fibonacci maths and are only indicative of what the mathematical
model throws up. This is not a recommendation to buy/sell.
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