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Sahmino callsCurrency

US DollarUSDNeutral

The free dollar's bullish target was rejected with a 3.75 percent jump, and its gap with the remittance dollar reached 42 percent

Horizon: Short-term (1 to 2 weeks, until 14 Mehr 1405)

Price when published

2,433,000 rials

That dayup3.5%

Support

2,402,600 rials

Invalidation

2,350,000 rials

The levels on the chart

Since writtenup10.5%

Conclusion

I'm closing the bullish call on reaching the target and going neutral: I put roughly 55 percent probability that the free dollar will not close below 2,350,000 rial by 14 Mehr, because the political risk that built the jump is still open. Risk runs both ways: a possible negotiation this week or a currency supply could take back part of the jump, while a fresh military headline could extend it.

The evidence

  • Free dollar on 6 Mehr 1405 at 13:19: 2,438,200 rial, 3.75 percent above the 2,350,000 rial close of 5 Mehr; today's rate is above the 2,359,750 rial card target from 4 Mehr, and today's close will register it.
  • This jump is about 2.6 times the 20-day daily volatility (1.43 percent); a single day's move like this does not confirm a trend change.
  • The exchange center's remittance dollar was 1,717,400 rial on 5 Mehr, and today's free dollar is about 42 percent above it, versus about 37 percent yesterday; this widening gap squeezes exporters' margin.
  • Today's trigger, per FXStreet (6 Mehr): Trump on Saturday rejected Iran's proposal to reopen the Strait of Hormuz in exchange for lifting the naval blockade, and said on Sunday that further strikes before the U.S. midterm elections are possible.

If it holds

If the rate holds above 2,402,600 rial (today's low), the base scenario is consolidation of the new step and the 40 percent gap with the remittance dollar staying open.

If it breaks

If the free dollar closes below 2,350,000 rial (the 5 Mehr close), this view is invalidated and today's jump has been fully retraced.

What to watch

What to watch: news of a possible negotiation this week, exchange center announcements and the remittance rate, and the gap between the free dollar and the remittance dollar.

Every call on this symbol

22 calls; the move to the next call from the prices when written

  1. 28 September 13:37NeutralThe free dollar's bullish target was rejected with a 3.75 percent jump, and its gap with the remittance dollar reached 42 percent2,433,000 rialsup10.5%
  2. 26 September 08:40BullishFree-market dollar hit the upper edge of our range on Mehr 2 and we are moving the call from neutral to bullish2,346,150 rialsup3.7%
  3. 20 September 14:03NeutralThe resistance I set was inside daily noise and broke meaninglessly; today's important number is the 39 percent gap between free market and havaleh2,310,050 rialsup1.6%
  4. 19 September 08:58BearishThis card and the dirham card are one trade, not two confirmations; the dirham is just this figure divided by 3.67252,279,000 rialsup1.4%
  5. 16 September 14:05NeutralThe band I called on Shahrivar 22 stayed intact; the free dollar settled in its lower half2,294,000 rialsdown0.7%
  6. 13 September 13:18NeutralFree-market/hub gap came to 40.8 percent from 44.8 percent across three readings; this time the official rate also rose2,308,000 rialsdown0.6%
  7. 13 September 08:58NeutralTether, which usually trades above the free dollar rate, closed 16,920 rial lower and this morning is sitting on our invalidation level2,339,000 rialsdown1.3%
  8. 12 September 13:49BullishThe 2,360,200 resistance we published this morning was broken by afternoon; the free-rate gap with the exchange center remittance rate reached 45 percent2,366,000 rialsdown1.1%
  9. 12 September 11:43BullishA wave that hasn't stopped, has caught its breath: today's range was 0.28 percent against a 20-day volatility of 1.49 percent2,352,150 rialsup0.6%
  10. 9 September 11:21BullishThe 2,272,050 ceiling was broken and today's low also held above it; the gap with the havaleh widened to 41.4 percent2,296,700 rialsup2.4%
  11. 9 September 09:07BullishThe free dollar recovered two sessions' worth of decline in a single session, returning to within 0.22 percent of its 52-week high2,267,000 rialsup1.3%
  12. 7 September 11:02BullishOur 2,232,600 rial support broke, just 2,600 rial lower; one red day but still not a trend change2,230,000 rialsup1.7%