Forex trading News and Strategy - RBI to release its weekly forex and bank credit data

In the Forex trading market yesterday Indian Rupee depreciated by 0.45 percent. As the Dollar index rose by 0.17 percent during the same time frame. In January 2020 so far the foreign investors have sold about $1.58 billion in debt. The funds flow coupled with the month end Dollar demand led to the depreciation in the Rupee IMF slashed India’s growth forecast by 1.3 percentage points to 4.8% for 2019-20.

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Forex Market News 

  • Rupee ended at 71.26 a dollar yesterday, down 7 paise against its previous close of 71.19.
  • FBIL set reference rate for dollar at 71.2056 and euro at 78.9124.
  • Global Funds Buy Net INR13.5b of India Stocks Thursday: NSE; Foreigners Buy Net INR26.5b Indian Equity Derivatives Thursday.
  • Yield on 6.45% bonds maturing July 2029 at 6.60% on Jan. 23.
  • RBI to release its weekly forex and bank credit data today.
  • US dollar edged higher against a basket of currencies on the back of deal virus concerns.
  • In the economic news, weekly jobless claims rose less than expected.
  • US markit manufacturing and services PMI flash for Jan are due in the day.
  • Euro traded near 7-week low after ECB policy meeting decision while UK's pound rose against euro on Brexit deal hopes.
  • ECB in its monetary policy meeting kept its interest rates unchanged as expected.
  • Data awaited for the region included Euro are and UK's manufacturing PMI flash.
  • USD/JPY is little changed as on Friday but down 0.6% this week after back-to-back weekly gains.
  • Data released showed Japan's inflation rate hit an 8-month high while services PMI rose to 4- month high.
  • China market to remain shut for a week for Lunar Holiday

Forex Trading - USDINR

USDINR opened on a flat note but buying led USDINR upwards to end in the green. USDINR closed at 71.3 with a gain of 0.06 %.

On the daily chart USDINR has formed a small bullish candle forming higher High-Low formation compare to previous session indicating positive bias. USDINR is moving in a Higher Top and Higher Bottom formation on the hourly chart indicating short term up trend. USDINR is trading below 20 and 50 day SMA's which are important short term moving averages, indicating negative bias in the short to medium term.

The chart pattern suggests that if USDINR crosses and sustains above 71.40 level it would witness buying which would lead USDINR towards 71.60- 71.80 levels. However if USDINR breaks below 71.20 level it would witness selling which would take USDINR towards 71-70.80.

The daily strength indicator RSI is moving upwards and above its reference line indicating positive bias. However momentum oscillator Stochastic has turned negative from the overbought zone indicating a possible consolidation or a downmove in the near term

Forex trading Intraday tip

Buy USDINR at 71.2650-71.2550 TGT 71.38 Stoploss 71.17

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