Rupee update: Will history repeats? Are we heading towards 59?
I am a chartist and I don’t look
for cause and effect relationship; but believes in what chart speaks to me.
This is an update on Indian Rupee post that we have made two weeks ago. Looking
at the Indian Rupee chart, an observation was made and that was shared two
weeks back. In that update I had informed that on the weekly chart if we close
below ~66.5 we are heading towards 59 mark, which could make our Rupee
stronger.
Now let us analyse the Big
Picture. Updated above is the Indian Rupee chart since 1998. I have bifurcated
the chart into distinct parts based on our Governor’s (in red dotted lines) and
on the basis of ruling party (in blue dotted lines). If you were to keenly
observe the chart, one thing could be observed: during the congress period both
UPA 1 and UPA 2, we have seen appreciation in first half followed by depreciation
during second half of their tenure. On the other hand during the previous BJP
government (under Vajpayee ji), we had seen a depreciation in the first half
followed by an appreciation in the second half. If history were to repeat;
under Modi ji this time, we could see depreciation in the first half of his
tenure (it has happened) and an appreciation in the second half (we shall wait
and watch; will INR hit 59 mark). Technically, the breakdown in the weekly
chart of the INR is showing signs of a stronger Rupee.
Disclaimer: I have not factored
in any other economic factors influencing INR movement; these observation are
purely based on technical charts.
If INR move towards 59 and below;
our economy would be stronger. Let’s hope as a country we grow stronger.
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