Rupee May Fall To 71.73/$ If Breaches Previous Record Low

USDINR Spot Buy @ 68.64 | Stop @ 64.40 | Target @ 69.12 — 71.73 — 75.78 — 77.68

Rupee May Fall To 71.73/$ If Breaches Previous Record Low

The Indian rupee, which has depreciated by about 4% against the US dollar since the start of 2016, is likely to continue its downtrend and may touch 71.73-75.78 levels in the medium term. The rupee closed at 68.64/$ on Friday.

The Indian rupee depreciated to test an all-time low of 68.84 (Point B) in August 2013 from 51.36 (Point A) level in October 2012. Thereafter, the rupee appreciated to test the level of 58.2 (Point C) in May 2014. The local currency fell again, moving in a Channel, and tested the low of 68.80 on Friday. The above chart shows that the rupee continues to be in A-B-C pattern.

The rupee is expected to cross its record low of 68.84 against the dollar and may further depreciate to test the level of 69.12 and 71.73, which are 61.8% and 76.4% expansion of Point A-Point B from Point C, respectively.

In the long term perspective looking from 2008 onwards, the rupee has depreciated from 39 levels and is showing a sign of the Elliot Wave Pattern. At present it is still in the Wave III continuation. There are also Inter-Wave in Lager Wave III.

The above chart indicates that Wave v is also in continuation as seen from the 58.2 (Wave iv) level onwards. The wave calculation table in the above chart shows that inter-wave v can move to test the level of 75.78 and 77.68, which are 100% and 121% of inter-wave i, respectively. 

The patterns indicate that if rupee breaches the level of 68.84 then the currency may witness sharp movement and fall towards 71.73 - 75.78 - 77.68 levels.

However, if rupee appreciates from the current level and crosses 66 then the currency may gain further to 62.15 levels.

Gold Outlook Weak; Faces Resistance At $1,280/oz

COMEX Spot Gold CMP:  $1,203/oz

Strategy: Sell Below 1,203 (CMP) | Stop @ 1,280| Target @ 1,140 — 1080 — 1025

The technical chart shows that COMEX Spot Gold is trading in a Downside Falling Channel, which indicates that prices may correct from the current level of $1,203/oz. The yellow metal is likely to remain under pressure if prices fail to cross the resistance level of 1,280 on the higher side on daily closing bases.

Gold declined from the high of 1,433 (Point A) in August 2013 and tested the low of 1,045 (Point B) in December last year. Thereafter, gold witnessed a sharp uptrend after testing the Lower Support Trend Line but couldn’t sustain at higher levels after touching Above Falling Trend Line, with prices moving in a range of 200 points.

The immediate support for gold is seen at 1,190 and if it breaks this level then prices would weaken further. Gold’s downtrend remains intact unless prices cross the resistance level of 1,280.

According to the technical chart, the difference between Point A and Point B is 388 points. Gold is likely to test the Lower Trend Line at 1025 and a further fall below this level may take prices to 876 on the lower side (1264-388).

However, if gold reverts from the current level and crosses the resistance of 1,240 then prices may rise towards 1,340 levels, which is 76.8% retracement from Point A to Point B.