After a sharp
recovery from a low of 52 towards 56.10 levels, the market started easing off
and seen a dip towards 54 levels which is just 50% retracement of the recovery
trend. The market has formed a falling wedge and rates have broken the upper
trend line of the pattern suggesting a possible upward momentum. Currently, the
market is trading below the 10 and 20 day’s EMA level and RSI is neutral around
0.50 levels.
The major support
for the market is around 54 levels and as long as it holds the same, weakness
is less likely. The resistance is seen at 55.10 levels.
The formation of falling
wedge at intermediate upward trend along with the behavior of market at Fibonacci
levels suggest possible recovery. Recommend
buying USDINR Dec future with stop loss below 54 with possible target of 55.10
and then 55.50.
Strategy: USDINR Dec 55 Put Option: Sell around
0.80-0.90 targeting 0-0.05 with stop loss above 1.15
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