USD/INR managed to push below support in the 55.20 area to extend and close as low as 55.05, recording losses for a third consecutive session. If the selling pressure persists in the session ahead, immediate support lies at 54.90 (18 May high), 54.77 (16 July low) and 54.56 (100-day EMA). If the market reverses, the upside offers resistance at 55.18 (30 July low) and 55.32 (55-day EMA).
On the fundamental front, hopes are growing that “the [Indian] government will undertake fiscal reforms after newly appointed Finance Minister P. Chidambaram said on Monday action is forthcoming,” the Economic Times reports. The rupee’s sustained strength is largely dependent whether the government can deliver on its comments, and on global risk factors.