JPY/INR Analysis
Morning Update: The JPY/INR pair is currently trading around 55.50; will it pull back or continue to fall ?
As previously noted, the JPY/INR encountered heavy resistance at 59.50 before falling quickly, as expected. The #JPYINR surged from 55 to 59.50, seeing substantial supply and resistance from the trendline and horizontal.
- Following a significant gain from 55.00, 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 fall, with each pullback presenting a chance to short.
- According to the chart, the JPY/INR pair is in a sell on rise pattern, with a rapid gain indicating a selling opportunity.
Please note the chart above, which shows a surge in demand when the YEN's value rose in contrast to the US dollar and the rupee. As a result, the JPY/INR increased from 55 odd levels to 59, gaining around 400 paisa. As we noted in our previous JPY/INR analysis, the price hit a double bottom around 55 before effectively rebounding.
Examine the above chart 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 efficiently, you must identify a trade opportunity with a high chance and low risk.
The initial trendline resistance level to target is between 59.50 and 59.70, which contains horizontal resistance. This zone, which represented the intersection of a trendline and horizontal resistance, provided a favorable risk-reward ratio for the short sell strategy. Let's have a look at the RSI on the daily chart and see how abundant supply is for JPY/INR.
The chart below shows negative divergence in the RSI for the JPY/INR pair. We'll go into further detail right immediately.
Please see the chart above, which shows that the RSI made lower lows, indicating bearish divergence, even if the JPY/INR price rose 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 increase, there appears to be an opportunity to sell, therefore JPY/INR may trade more often. The lowest predicted values in the coming days are 54.50 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 range, the JPY/INR short sell trade will have a favorable risk-reward ratio.
The JPY/INR may see a little pullback as it trades around the support zone, and it may even rise to the 57.50-58.00 range again, but this is only 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, with any increase in price implying a potential sell opportunity in the future. The disadvantage is still available in the 55.00 and 54.50 zones.
Please refer to the weekly chart to establish the JPY/INR support and resistance levels. Every level is represented by a spot chart.
|
JPY/INR |
Support |
Resistance |
|
Level 1 |
55.00 |
59.50 |
|
Level 2 |
54.50 |
60.00 |