1-2-3 is forming a ascending triple bottom, and also the end points of a classic Head & Shoulder pattern.
If the Blue trendline breaks... target is the Black horizontal line at 6.5%. It will find support at the red trendline also around 7% level.
If rates go down (we have to wait for the Blue trendline decisive break)..
It'll mean comparatively more flows into the equity market/ risk assets.
There is a slight divergence here wrt to our post on the USDINR, where we have said INR will depreciate. If this be so, then the Blue 1-2-3 trendline should not break, and the yield should go upwards.
On the on the other hand if INR appreciates, then rates falling are in consonance. INR up means more money coming in, implies rates need not be hard in a flush environment.
