Below is my analysis on INR. In addition i have reposted my analysis of August 2015 so you can compare the waves.

Deeper Correction in Dow, Post FED Meeting on 15th Sept & After Effects

I usually do not like to make dramatic statements and for the DJIA which corrected heavily during end of August I had only taken 16,000 as a correction point. If the coming week with the FED meeting approaching, the DJIA close is below 16,000, i believe there would be a sharp sell off again towards 13,820. In short September should be a happening month.

Effect on Sensex: Usually a 1000 point drop on the Dow means a 2000 point drop on Sensex. In all likelihood another sell off could happen targeting 21000 on the Sensex.

Effect on USD/INR: The Indian Rupee would touch 70, which would be the top for all times to come.

Effect on EUR/USD: Euro would move ahead of its previous recent high and target 1.1920.

WTI Crude: I don't expect crude to be a beneficiary of all this chaos created by the Dow however will be able to say next week after FED meeting.

USD/CHF & USD/JPY: I find these both counters very good sells at current levels.

USD/INR - August 2015 - Trade opportunity unfolding

USD/INR has continued to weaken as indicated by my earlier analysis, however i did not foresee the devaluation of the YUAN coming. Though 2.8% devaluation of the yuan is not much but the fact remains that another 2% or so could be cut by the Chinese Central Bank. So a strengthening Dollar, RBI cutting Interest Rates and now a devaluing yuan (Which is a major trading partner with most Asian Economies including India (China is India's largest trading partner and USA is number 2 since 2013) has all set into motion a rupee that is weakening. I however expect this to be the last leg of weakening for the rupee as also strengthening for the Dollar. The only change i would not like to make is that though earlier i did not expect INR to cross the previous high, with the yuan factor now in play i would be open to the Rupee briefly flirting with INR 70 before strengthening.

FED will start to hike rates from Sept or possibly from the next meeting after September this year in October. This will result in weakening of the Dollar as against usual wisdom that an increase in interest rates makes the currency stronger. This will also result in strengthening of the INR. There are of course other factors that will make the rupee stronger as already discussed in my earlier articles.

Below once again is the Chart I had put up earlier to see the INR right on track.

My target for USD/INR over the long term (end of 2016) will be the 50% retracement level for USD/INR which is approximately Rs. 53 to the US Dollar.