Highest Dollar / Nifty Correlation seen
30 Oct 2020 ● 04:05 AM
The dollar index and nifty historically have never had as strong correlation as they have had since March 2020. Thus, every time there is a slight bump up in the dollar index nifty tends to correct or pullback at the same time. Last night the dollar surpassed 94 making a case for a further move higher towards 95.3 or more. This puts some short-term risk on the table. Of course historically there have been also periods where the 2 have diverged from each other but not in the recent past. We might need to watch this closely for the next couple of days. The degree of pullback completely depends on where the nifty is within its larger wave structure, if we get a clear signal that the market is heading up when we can ignore such factors. As of now this keeps us on our toes.