JPY/INR Analysis

• Ruchit Thakur

JPY/INR Analysis

Morning update: The JPY/INR pair is trading at exactly 55.10. Will it reverse course or continue to fall ?

As previously said, the JPY/INR saw heavy resistance at 59.50 before falling as expected. The trendline and horizontal produced strong supply and resistance as the #JPYINR dropped from 59.50 to 55.00.

• The JPY/INR entered supply at 59, up from 55.00, and broke. 
• The weekly chart's crucial resistance support zone of 54.50-55.00 shows that JPY/INR may drop back, presenting a long opportunity.
• The JPY/INR pair may bounce from its current level, with a pullback to the 57.50-58.00 range.

Please take note of the accompanying chart, which shows a rise in demand as the YEN's value grew compared to the US dollar and the rupee. As a result, the JPY/INR gained over 400 paisa, moving from 55 odd levels to 59.00-59.50 range. As we mentioned in our previous JPY/INR analysis, the price achieved a double bottom at around 54.80.55.00 before beginning to rise again.

There was horizontal resistance between 59.50 and 59.70, which represents the initial trendline resistance level to the goal. This zone provided a strong risk-reward ratio for the short sell strategy because it was where a trendline and horizontal resistance intersected. We suggested a short sell trade at the time, and JPY/INR plummeted from 59.50 to 55.00 odd levels.

If we look at the weekly chart of JPY/INR, we can see that the pair is once again approaching the demand zone of 54.50-55.00 and forming a triple bottom. 

The triple bottom chart pattern often occurs after a prolonged slump in which bears have control of the market. While the first bottom could simply represent regular price fluctuation, the second bottom indicates that the bulls are gaining momentum and preparing for a probable reversal. The third bottom suggests that there is significant support in place, and bears may capitulate if the price breaches resistance levels.

So we should expect a bounce in JPY/INR from its current level, with the pair potentially moving up to the 57.50-58.00 zone during this bounce.

Please refer to the weekly chart to find the levels of JPY/INR support and resistance. Spot charts are used to depict each stage.