JPY/INR Analysis
Morning Update: The JPY/INR pair is currently trading around 56.00; will it pull back or continue to fall ?
As previously stated, the JPY/INR hit a strong resistance zone of 59.50 before falling sharply, as expected. The #JPYINR jumped from 55 to 59.50, where it encountered significant supply and resistance from the trendline and horizontal.
- Following a big increase from the 55.00 level, the JPY/INR entered supply at 59 and cracked.
- On the weekly chart, the substantial resistance zone of 59.50-59.70 suggests that JPY/INR may continue to trend downward, with every pullback providing an opportunity to short.
- According to the chart, the JPY/INR pair is in a sell on rise pattern, with a sharp gain signaling a selling opportunity.
Please see the chart above, which illustrates a jump in demand as the YEN's value increased in comparison to the US dollar and the rupee. As a result, the JPY/INR rose from 55 odd levels to 59, gaining around 400 paisa. As we noted in our previous JPY/INR analysis, the price formed a double bottom around 55 before successfully rebounding.
Examine the chart above to identify the weekly chart's confluence zone. A confluence zone is formed when two or more trading indicators combine to generate a strong buy or sell signal. To trade efficiently, you must find a trade opportunity with a high probability yet minimal risk.
The initial trendline resistance level to target is 59.50-59.70, which also includes horizontal resistance. This zone, which marked the confluence of a trendline and horizontal resistance, offered a positive risk-reward ratio for the short sell strategy. Let's have a look at the RSI on the daily chart and how abundant supply is for JPY/INR.
Please see the chart below, which shows negative divergence in the RSI for the JPY/INR pair. We will go into more depth right away.
Please examine the chart above, which shows that the RSI made lower lows, signifying bearish divergence, even if the JPY/INR price gained marginally.
An RSI divergence happens when the price moves in the opposite direction of the RSI. In other words, a movement in momentum may appear on a chart before a corresponding price change. A bearish divergence happens when the RSI reading gets overbought, followed by a lower high that corresponds to higher highs in the market.
With each uptick, there appears to be an opportunity to sell, therefore JPY/INR may trade more frequently. The lowest readings expected in the following days are 54.50 and 55.00. Because the upward charts show strong resistance in the 59.00-59.50 range with negative RSI divergence, while the downside is open for the 54.50-55.00 range, the JPY/INR short sell trade will benefit from a good risk-reward ratio.
The JPY/INR may see a minor pullback as it trades near the support zone, and it may even rise to the 58.50-59.00 range again, but this is merely a shorting opportunity. The narrow support zone of 54.50-55.00 may see further rises in JPY/INR, but the overall outlook remains the same, and any increase in price implies a potential sell opportunity for JPY/INR in the future. The downside remains available in the 55.00 and 54.50 zones.
Please see the weekly chart to determine the JPY/INR support and resistance levels. Each level is represented by a spot chart.
|
JPY/INR |
Support |
Resistance |
|
Level 1 |
55.00 |
59.50 |
|
Level 2 |
54.50 |
60.00 |