Currency Market Outlook

Results Corner
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USDINR: (Intraday bias- Range bound.
Support Feb futures – 82.95 and 82.85
Resistance- 83.10 and 83.20)

Trading in the USDINR pair continues with subdued momentum, confined within a narrow range. The broader range stretches from 82.70/80 to 83.40/50 levels on the spot, while a more defined range is seen between 82.80 and 83.20. Consequently, traders might prefer to wait for a retracement towards the 82.80/90 levels on the spot before considering new long positions. Similarly, in the event of a pullback towards 83.15/20 levels, one could consider shorting with a stop above 83.20 on a spot basis. Conversely, those holding short positions may find it wise to set a stop loss and consider a reversal beyond 83.20 levels on the spot.

GBPINR: (Intraday bias – Range bound.
Support Feb futures- 104.70 and 104.50
Resistance – 105.10 and 105.30

This week presents significant tests for the GBP, as key economic data is due for release. Wage data on Tuesday, inflation figures on Wednesday, monthly/annual GDP on Thursday, and retail sales on Friday will shape market sentiment. Traders anticipate a slight uptick in UK inflation for January, possibly reaching 4.1% from the previous 4.0%. Concerns loom over a potential Q4 GDP contraction, adding to caution surrounding the pound.

Despite a recent sharp decline, GBPUSD and GBPINR have been slowly recovering. However, the sustainability of this rebound depends on forthcoming economic data. Positive surprises could bolster Pound Sterling, affirming the Bank’s patient stance on rate cuts. Conversely, disappointing figures may renew downward pressure.

Given potential volatility, traders should stay agile, focusing on intraday strategies. Currency pair direction may fluctuate based on economic releases, demanding flexibility and quick decisions.

EURINR: (Intraday Bias- Range bound.
Support Feb futures – 89.50 and 89.30,
Resistance – 89.90 and 90.15)

This week, all eyes will be on US inflation and retail sales data, which could significantly impact the US Dollar Index. Stronger data has the potential to boost the index, consequently exerting downward pressure on EURUSD and EURINR. Therefore, it’s crucial to closely monitor these data releases.

Following last Monday’s notable decline, EURINR has attempted to recover, but its further progress hinges on the upcoming US economic data. A stronger dataset could prompt a reversal in the Euro’s gains, while weaker figures might propel EURINR back towards its recent highs. Given the potential for market volatility, traders are advised to remain flexible and focus on intraday trading strategies to navigate potential shifts in currency pairs.

JPYINR: (Intra-day bias- Downward.
Support Feb futures- 55.65 and 55.40,
Resistance- 56.00 and 56.20)

Short sellers in JPYINR are staying active due to stable US bond yields, a range-bound US dollar index, and a significant month-over-month premium. The bias in USDJPY remains upward as long as it stays above 145.80, leading to a downward bias in JPYINR. Carry traders should be cautious, keeping overnight position sizes small and implementing proper stop losses. Failure to manage risk effectively can result in substantial losses on positions.

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