JPY/INR Analysis

• 05 January, 2024 Ruchit Thakur

JPY/INR Analysis

Morning Update: Is the JPY/INR pair going to invert or bounce from its current zone of 57.50 ?

As we mentioned in our previous analysis, the JPY/INR broke down beautifully after reaching the significant resistance zone of 59.50, as illustrated. The JPY/INR came down sharply from the 59.50 to 57.50 zone, where it confronted substantial supply and major resistance from the trendline and horizontal.

• After rising sharply from the 55.00 zone, the JPY/INR encountered supply at 59.00-59.50 levels.
• The strong resistance zone of 59.50–59.70 on the weekly chart suggests that there may be more negative trending action for JPY/INR.
• The price was pushed lower at the intersection of the trend line resistance and horizontal resistance at 59.50–59.70.

JPY/INR increased from around 55 odd levels to 59 and gained nearly 400 paisa due to high demand as the value of YEN surged vs the US dollar and the rupee. Around the 55 zone, as we discussed in our earlier JPY/INR analysis, price formed a double bottom, and it precisely rebounded from that point.

Examine the above chart and make a note of the confluence zone on the weekly chart. Where two or more trading signals converge to provide a strong buy or sell signal is known as a confluence zone. Locating a trade opportunity with a high probability and little risk is essential for effective trading.

The 59.50–59.70 zone is the first area of trendline resistance to approach, and the same zone is also the location of horizontal resistance. This zone offered a great risk-to-reward ratio for entering the short sell trade because it represented the convergence of horizontal resistance and trendline resistance. With a risk of about 40–50 paise and a target of 200–250 paise, this was a very profitable opportunity.

The accompanying chart demonstrates that the level of 59.50–59.70 is where both trendline resistance and horizontal resistance are found. JPY/INR dropped precipitously after entering this zone, and further declines could be seen. The downside is open for 56.50 and 55, respectively. 

Please check the support and resistance level of USD/JPY on the weekly chart. All levels are in spot chart :