JPY/INR Analysis
Morning Update: The JPY/INR pair is trading at 56.50; will it pull back from its present level or continue to fall ?
As we previously stated, the JPY/INR achieved a significant resistance zone of 59.50 before plunging significantly, as indicated. The #JPYINR bounced from 55 to 59.50, where it encountered considerable supply and resistance from the trendline and horizontal.
- Following a significant gain from the 55.00 zone, the JPY/INR entered supply at 59 and cracked.
- On the weekly chart, the significant resistance zone of 59.50-59.70 indicates that JPY/INR may continue to trend downward, and any pullback could be an opportunity to short.
- According to the chart, the JPY/INR pair is in a sell on rise pattern, with a rapid gain signaling a selling opportunity.
Please note the chart above, which shows that there was a surge in demand when the YEN's value grew compared to the US dollar and the rupee. As a result, the JPY/INR increased from 55 odd levels to 59, gaining about 400 paisa. As we mentioned in our last JPY/INR analysis, the price established a double bottom around 55 before accurately rebounding.
Examine the chart above to determine the weekly chart's confluence zone. A confluence zone occurs when two or more trading indicators combine to produce a strong buy or sell signal. To trade effectively, you must identify a trade opportunity with a high probability yet low risk.
The initial trendline resistance area to approach is the 59.50-59.70 range, which also includes horizontal resistance. This zone, which represented the intersection of a trendline and horizontal resistance, provided a favorable risk-reward ratio for pursuing the short sell strategy. This was an extremely successful opportunity, with a target of 200-250 paise and a risk of roughly 40-50 paise, as previously stated. Now let's look at the RSI on the daily chart and how abundant supply is for JPY/INR.
Please note the chart below, which shows negative divergence in the RSI for the JPY/INR pair. We'll go into further detail right immediately.
Please observe the chart above, which shows that the RSI made lower lows, signaling bearish divergence, even if the JPY/INR price increased marginally.
An RSI divergence occurs when the price moves against the RSI. In other words, a shift in momentum may appear on a chart before a corresponding shift in price. A bearish divergence occurs when the RSI reading becomes overbought and is followed by a lower high that coincides with higher highs in the price.
With each rise, there appears to be an opportunity to sell, therefore JPY/INR may be sold more frequently. The lowest values in the coming days will be 54.40 and 55.00. Because the upward charts show strong resistance in the 59.00-59.50 zone with negative RSI divergence, while the downside is open for the 54.50-55.00 zone, the JPY/INR short sell trade will gain from a favorable risk-reward ratio.
The JPY/INR may now face a slight pullback as it trades near the support zone, and it may even rise to the 58.50-59.00 range again, but this will only be a shorting opportunity. The narrow support zone of 54.50-55.00 may see further rises in JPY/INR, but the broader perspective has not changed, and any increase in price signals a potential sell opportunity for JPY/INR in the future. The downside remains available for the 55.00 and 54.80 zones, respectively.
Please refer to the weekly chart to identify the JPY/INR support and resistance levels. Every level is represented by a spot chart.
|
JPY/INR |
Support |
Resistance |
|
Level 1 |
55.20 |
59.50 |
|
Level 2 |
54.80 |
60.00 |