The Indian Rupee comes under pressure amid renewed US-Iran tensions. What’s next?
FUNDAMENTAL OVERVIEW
USD:
The US dollar extended the losses on Friday following a barrage of positive news on the US-Iran front that seemed to point to an imminent deal after Iran announced the reopening of the Strait of Hormuz.
The greenback eventually erased the losses heading into the weekend after Trump said that the US would keep the blockade of the Strait of Hormuz in place until a deal with Iran was finalized. Traders might have hedged into the weekend due the risk of an escalation. This is exactly what happened as Iran reclosed the Strait in retaliation to the US blockade.
The good news is that the ceasefire is still holding and we are still getting reports of talks and preference for a diplomatic resolution which is keeping the markets afloat. The bad news is that the ceasefire expires tomorrow unless we get another extension which is what the market expects given Trump’s track record.
The price action continues to be driven by US-Iran headlines and this is unlikely to change until we get an official resolution.
INR:
The Indian rupee stabilised in the past couple of weeks as the risk-on sentiment amid the US-Iran deal optimism gave the currency a reprieve. The focus remains on US-Iran negotiations as everything hinges on their outcome, although the renewed tensions are keeping the risk mood a bit on the defensive.
In terms of macro, the RBI held interest rates steady at 5.25% and downgraded growth forecasts due to the US-Iran war at the last policy meeting. The central bank expects inflation to increase in the short-term and growth to slow down.
In the big picture, the Indian Rupee remains on a bearish structural trend against the US dollar, so the dip-buyers will likely look for opportunities around strong technical levels to keep pushing into new highs, but for now the Rupee could remain supported and extend the relief rally in case the US-Iran war ends.
USDINR TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that USDINR extended the fall on US-Iran optimism last week but then rebounded late Friday on some hedging into the weekend. The target for the sellers remains the lower bound of the channel but if we get a pullback into the upper bound of the channel, we can expect the sellers to step in there again to position for new lows. The buyers, on the other hand, will need a break above the upper bound of the channel to open the door for new highs.
USDINR TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have a minor downward trendline acting as resistance. The sellers will likely continue to lean on the trendline to keep pushing into new lows, while the buyers will look for a break higher to pile in to extend the rebound into the upper bound of the channel.
USDINR TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as the sellers will likely continue to lean on the trendline, while the buyers will look to extend the rally into the 94.00 resistance in case of a breakout.
UPCOMING CATALYSTS
Tomorrow we have the US Retail Sales. On Thursday, we get the latest US Jobless Claims figures and the US PMIs. The focus remains on US-Iran headlines ahead of the ceasefire deadline tomorrow.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
FX初心者には必須 無料のうちにGET！
