JPY/INR Analysis
Morning Update: At exactly 55.20, the JPY/INR pair is trading. Will it reverse course or keep falling ?
As mentioned before, the JPY/INR had strong resistance at 59.50 before it fell as predicted. The trendline and horizontal provided strong supply and resistance as the #JPYINR spiked from 55 to 59.50.
- At 59.00, after a notable increase from 55.00, the JPY/INR entered supply and broke.
- The important resistance zone of 59.50-59.70 on the weekly chart suggests that JPY/INR may drop further, with each retracement offering an opportunity to short.
- The JPY/INR pair is in a sell on rise pattern, as seen by the chart, with a quick gain suggesting a selling opportunity.
Please take note of the preceding chart, which illustrates an increase in demand as the value of the YEN increased relative to the US dollar and the rupee. Consequently, the JPY/INR gained almost 400 paisa, rising from 55.00 odd levels to 59.00. The price reached a double bottom at approximately 55.00 before it started to rise again, as we mentioned in our earlier analysis of the JPY/INR.
Find the confluence zone of the weekly chart by examining the chart above. When two or more trading indicators come together to generate a strong buy or sell signal, this is known as a confluence zone. Finding a trade opportunity with a high chance and low risk is essential for efficient trading.
There is horizontal resistance between 59.50 and 59.70, which is the first trendline resistance level to the goal. This zone offered a good risk-reward ratio for the short sell strategy since it was the point where a trendline and horizontal resistance met. Let's examine the RSI on the daily chart to determine the level of supply abundance for JPY/INR.
The JPY/INR pair's RSI exhibits negative divergence, as seen in the chart below. We will discuss this in more depth right now.
Please refer to the chart above, which demonstrates that even if the price of the JPY/INR increased somewhat, the RSI produced lower lows, indicating bearish divergence.
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.
JPY/INR may trade more frequently because there seems to be a chance to sell with each increase. The figures that are most likely to occur in the next days are 54.50 and 55.00. The JPY/INR short sell trade will have a positive risk-reward ratio 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 region.
It's possible that the JPY/INR will slightly retrace as it moves within the support zone, and it might even rise back to the 57.50–58.00 range, but this is merely a shorting opportunity. The JPY/INR may rise higher inside the narrow support range of 54.50 - 55.00, but the broader picture is still the same and any price increase suggests a possible sell opportunity down the road. The zones 55.00 and 54.50 still have the disadvantage.
To determine the levels of support and resistance for the JPY/INR, please consult the weekly chart. Spot charts are used to represent each level.
|
JPY/INR |
Support |
Resistance |
|
Level 1 |
55.00 |
59.50 |
|
Level 2 |
54.50 |
60.00 |