Answer: Hit the Ceiling 3 times
The first time sharp depreciation happened when Indian economic crisis became worse in July-August 2013 after US Fed announced its intention of Tapering. INR went into free fall and depreciated sharply to 68.85 by Aug 2013.
August 2013 was the darkest hour for Indian economy. INR in free fall and came in appointment of Rajan as RBI Gov and Modi as PM candidate
— Deepak Singh (@smarket) June 1, 2016
It was then followed by 3 year of super stability when it comes to INR
Raghuram Rajan took office in Sep 2013: USDINR = 66
Today it is at 67
USD index then 83...today it is 94
— Deepak Singh (@smarket) June 18, 2016
2016: NPA crisis, Demonetization and Strong Dollar
2016 has been very chaotic year. First - INR witnessed depreciation to 68.85 in Feb 2016 due to Global market correciton + NPA crisis and then again in Nov - it witnessed another wave of selling to 68.85 post demonetization announcement. The good news - despite panic - INR pulled back from 68.85
68.85 is now Major Resistance
Technically - when any asset hits the same level again and again and pull back from the resistance - then that level gains significance. The level of 68.85 is now very important.
What does this mean?
Why watch 68.85 levels on USDINR?
1 USD = 68.68 INR now
A breakout above 68.85 can take it to 72-75 region pic.twitter.com/qNNetzflbJ
— Deepak Singh (@smarket) November 29, 2016
If INR breaks the ceiling of 68.85 - then it can sharply depreciate to 73-75 levels. But as long as INR trades below 68.85 - there is HOPE that a sharp depreciation might not happen.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers