The Indian Rupee stays rangebound as traders await key US data for the next direction
FUNDAMENTAL
OVERVIEW
USD:
The US dollar has been supported since the last FOMC decision as the more
hawkish than expected dot plot led to a quick repricing in interest rate
expectations with traders increasing rate hike probabilities.
There is now 32 bps of tightening priced in by year-end. There’s a 29%
chance of a hike in July and 62% probability of a move in September.
There’s been a slightly dovish repricing in the last few days. One of the
reasons could be the huge selloff in oil prices which have now reached pre-war
levels. The other reason is that the hawkish repricing might have reached a
near-term peak and for more we will likely need upside surprises in the NFP and
CPI reports.
Although the greenback should remain supported into the data, we might
start to see some consolidation or even pullbacks if we don’t get any
meaningful catalyst before the key US data.
INR:
On the INR side, the
Rupee has been supported amid falling oil prices that have eventually reached
pre-war levels. More recently, the price action became rangebound as the surprisingly
hawkish FOMC decision boosted the US dollar across the board.
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 the USD/INR pair into new highs.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily
chart, we can see that USDINR is still consolidating just below the 95.00 handle. We have a major downward
trendline defining the bearish momentum. We can expect the sellers to lean on
the trendline with a defined risk above it to keep pushing into new lows. The
buyers, on the other hand, will look for a break to pile in for a rally into
the 96.00 handle next.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour
chart, we can see more clearly that we have a strong resistance zone around the
95.10 area where there’s also the downward trendline for confluence. That’s
where we can expect the sellers to step in with a defined risk above the
trendline to position for a drop into the 94.00 handle. The buyers, on the
other hand, will want to see the price breaking higher to open the door for a
rally into new highs.
USDINR TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, we have a minor upward trendline defining the current pullback into the
95.10 resistance. The buyers will likely continue to lean on the trendline to
keep pushing into new highs, while the sellers will look for a break lower to pile
in for a drop into the 94.00 handle next.
UPCOMING CATALYSTS
Tomorrow, we get the US Job
Openings data and the US Consumer Confidence report. On Wednesday, we have the
US ADP report and the US ISM Manufacturing PMI. On Thursday, we conclude with
the US NFP report, and the US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.