Breaking the RBI

CURRENCY WATCH

The rupee is headed down to 43 and lower against the dollar.

A trader broke the Bank of England on September 16, 1992, and earned $1 billion from the deal.

How far is our market from full currency convertibility and from creating traders who can break the Reserve Bank of India? Will we see such a scenario some day in emerging markets?

High tech price quote systems trade Indian rupee, similar to other top traded currencies like the euro, dollar or yen. We are no more in a low-trading age of the rupee"�at $0.75 billion estimated per trading day, we have our fair share in the trillion dollar daily traded forex market. The rupee volume is sizeable to give seasoned currency traders some ideas.

At Or-phe-us, we have no clue if RBI will ever come down like that, but what we are sure about is that the time ahead will be volatile and the next decade belongs to volatility, as an emerging and profitable asset class.

You never know, the VIX Futures and Options, which we attempted to trade earlier, are still struggling like Nifty Futures in year 2000, a few bids and fewer ask.

Coming back to the rupee, the currency is headed down to 43 and lower against the dollar, despite what the RBI does, despite macro economic conditions, despite the seasoned trader.

This is our multi-month forecast. At this stage the rupee should be spurting up in a C wave (see Rupee vs Dollar) back to plus 45 levels, before it continues the move down.

Strange isn't it that on one side we have the professors, the economists, the politicians, the Bank of England, the RBI and on the other side a pattern, Fibonacci sequence, and some statistical indicators.

Contributed by Orpheus Capitals (or-phe-us.com), a global alternative research company

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