KEY POINTS
- Indian Rupee fell to a new record low
- US-India trade talks ongoing
- India inflation data to be released tomorrow
FUNDAMENTAL OVERVIEW
The USD weakened across all the major currencies following the Fed’s decision as the central bank communicated a higher bar for further rate cuts, but Fed Chair Powell delivered a more dovish message by downplaying inflation risk and focusing more on the labour market. Despite that, the INR fell into new record lows against the US dollar as the structural headwinds keep the pair in a bullish trend.
We have US-India trade talks underway in New Delhi at the moment, and although a trade deal is still seen some distance away, India is hoping to seal at least a basic framework before year-end. That could give the Indian Rupee some relief although it wouldn’t change the big picture trend. In case, we get some negative news, then the INR will likely fall some more.
USDINR TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that USDINR has been trading in a rising channel, with the price getting closer to the upper bound of the channel around the 91.00 level. If the price gets there, we can expect the sellers to step in with a defined risk above the top trendline to position for a pullback into the lower bound of the channel. The buyers, on the other hand, will look for a break higher to increase the bullish bets into new record highs.
USDINR TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see that the pair rose into a new record high before pulling back a bit. The sellers will likely step in here with a defined risk above the recent high to target a pullback into the 89.70 support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 91.00 level.
USDINR TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see that the break above the minor resistance zone around the 90.05 level increased the momentum as more buyers piled in to target new record highs. If we get a pullback, the buyers will be looking for dip-buying opportunities around the 90.05 level and the 89.70 support. The sellers, on the other hand, will look for downside breaks to keep targeting new lows.
UPCOMING CATALYSTS
Tomorrow we have Indian inflation data. Since yesterday, we have US-India trade talks ongoing for a two-day meeting.
