Wait...
  1. Home >
  2. Export Import News >
  3. Economy News >
  4. No rate cut by RBI gives strength to INR, traders can form unconventional short strangle >
  5. No rate cut by RBI gives strength to INR, traders can form unconventional short strangle

Online Export Import Data Search

Recent Searches: No Recent Searches
Complete Training Video : Click Here

No rate cut by RBI gives strength to INR, traders can form unconventional short strangle.


Date: 10-12-2019
Subject: No rate cut by RBI gives strength to INR, traders can form unconventional short strangle
Rudra Shares and Stock Brokers

The bulls have taken a pause after four weeks of continuous up move in USD/INR. The rally has abated and a sharp decline witnessed, with the currency pair closing with the loss of 50 paise on a weekly basis. The bulls were trapped at higher levels and prices are again seems to be stuck in the sideways zone.

This week, traders can expect the currency pair to fall back in the consolidation phase, with a slightly negative bias in 71.15 to 71.75 range against the US dollar. Price has taken resistance of falling trendline and formed a bearish engulfing candlestick pattern on the weekly chart.

The big red candle has engulfed the real body of the last three candles and this price action suggests that the bulls are tired for the time being and reluctant to take the up move forward.

The immediate short-term base for the currency pair is still intact at 71.1, which is also a previous gap area. Traders need to be cautious at these levels. Any fall below 71.10 could further enhance the profit booking and fall in such case till 70.60 will not be ruled out.

On the daily chart, after a fall from higher levels, a “Doji” pattern is formed, suggesting that we could go sideways for the next few trading sessions.

There are two likely scenarios and traders need to be flexible enough to deal with them. Firstly, there is a high possibility that the currency pair may trade in the range of 71.15 to 71.75 in the upcoming week, as prices are trading near the 50-day exponential moving average, which could cap the fall and will act as a support.

The daily relative strength index (RSI) is trading in a sideways zone and declining ADX suggests that the bulls and the bears are reluctant to enter actively in the currency pair at current levels.

Secondly, there is a probability of the correction extending further. If 71.10 trades on the lower side, 70.60 can be the expected level. Though the chances of the second scenario are quite remote.

Trading strategy

A rate cut of 25 basis points was expected in the recent monitory policy but the RBI opted for status quo, which is likely to strengthen the Indian rupee in the short term. Overall technical structure, as discussed above, is also suggesting the same, so we believe that traders can form unconventional short strangle and short with 1 lot of 71 PE at 0.080 paisa and 2 lots 71.75 CE at 0.040 of December 13 contract.

Source: moneycontrol.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Both
 Buyers
 Suppliers
 Both
OR
 Exim Help
+


What is New?

Date: 20-01-2020
A.P. (DIR Series) Circular No.17
Introduction of Rupee derivatives at International Financial Services Centres (IFSC)

Date: 17-01-2020
TRADE NOTICE NO. 46/2019-20
Mis-classification goods under 'Others' category at the time of Import- reg.

Date: 16-01-2020
Notification No.05/2020 - Customs (N.T.)
Exchange Rates Notification No.05/2020-Custom (NT) dated 16.01.2020.

Date: 15-01-2020
Notification No. 03/2020- Customs (N.T.)
Notification of Ghasuapara LCS for imports also by amendment of Notification No. 63/1994-Customs dated 21st November 1994

Date: 15-01-2020
Notification No. 04/2020-CUSTOMS (N.T.)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seed, Areca nut, Gold & Silver - reg.

Date: 15-01-2020
Circular No 03/2020-Customs
Implementation of PGA e-SANCHIT– Paperless Processing under SWIFTUploading of Licenses/Permits/Certificates/Other Authorizations (LPCOs) by PGAs – reg

Date: 15-01-2020
A.P. (DIR Series) Circular No. 16
Hedging of Commodity Price Risk and Freight Risk in Overseas Markets (Reserve Bank) Directions, 2018 - Amendment

Date: 14-01-2020
PUBLIC NOTICE No. 56/2015-2020
Amendments in Standard Input Output Norms (SION) of Engineering Product group: Suspension of SION C-888 - reg

Date: 14-01-2020
Notification No. 4/2020-Customs (N.T./CAA/EXTENSION/DRI)
Appointment of CAA by DGRI

Date: 13-01-2020
Notification No. 05/2020 – Central Tax
Seeks to appoint Revisional Authority under CGST Act, 2017.



Exim Guru Copyright © 1999-2020 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.

EximGuru.com

C/o Infodrive India
E-2, 3rd Floor, Kalkaji Main Road
New Delhi - 110019, India
Phone : 011 - 40703001