USDINR is one of the highly traded currency pair and keeping close watch on the same is very important. There is lot of speculation about the impact of USDINR on Nifty is made my experts. Also, to be objective in the market, it is very important to look at the trend of each of these asset classes.
Below is the research published in our monthly report showing detail analysis whether USDINR and Nifty are really correlated or not!
USDINR and Nifty daily chart:( Anticipated as on 8th of November, 2018)
(Below is the gist taken from our monthly report published on 9th of November, 2018)
Equity markets and USDINR has continued to show an awe-inspiring correlation amongst each other and just how many traders/investors rely on world markets & other factors to understand the market movement. Alternatively one can look at the movement of USDINR to act as a secondary confirmation for equity reversal as well.
In our earlier monthly update, we mentioned, “If USDINR starts moving back towards the level of 67 as it will indicate that USDINR formed an important low which might point towards impending top in Equity markets!” similar movements were witnessed in both USDINR & Nifty Index. But remember that at major turning juncture they are highly correlated and later they follow their own individual path.
Above mentioned is the USDINR & Nifty correlation chart which clearly states how the currency pair and the Index work. The Nifty Index is shown in Black color & the red color indicates the currency pair. Whenever Nifty formed a new top we saw INR appreciating and the same is marked by the arrows. Also recently when USDINR reversed on downside after touching lifetime high near 75 levels, we witnessed Nifty forming a low near 10000 levels and reversing on upside.
If we look at the internal counts of USDINR we can see that short term high is made and we can start seeing appreciation in INR over short term. This is also in sync with our view of Nifty showing retracement in the form of wave b. The magnitude of rise on Nifty and fall in USDINR will vary.
So, it is apt to keep a track of other assets and plot it simply to see what is the correlation between them and if they provide any lead lag behavior. USDINR reversal from??? was another clue for us to capture a low on Nifty near ………. It is amazing to see how everything is highly linked together!
The above analysis clearly shows that USDINR and Nifty are correlated. Get access to amazing research like this on major indices as well as various asset class in our monthly report published under the name of “The Financial Waves Monthly Update”
Learn the application of above techniques on different markets – Equity, Commodity and Currency in the upcoming training on 24th and 25th November in Ahemdabad and develop trading strategy. Know more here