USD/INR bounces off 13-day low amid fresh risk aversion wave
|- The US President’s passage of Hong Kong bill recently triggered trade war fears, USD/INR responds to the news after markets in India open.
- China/Hong Kong criticizes the US action.
- Thanksgiving Holiday, a lack of major data/events can restrict the market’s reaction to the news.
Given the increasing odds of a trade war between the United States (US) and China, Asian traders adhere to risk aversion. In doing so, the USD/INR pair takes a U-turn from multi-day low to 71.37 as Indian markets open for Thursday’s trading.
US President Donald Trump finally signed the Hong Kong bill after a few days of it being through the US Congress. Even if the Republican leader’s move gets broad appreciation at home, diplomats from China and Hong Kong harshly criticize the US interference in their personal issues.
As a result, markets in Asia witness a downside pressure and the same could be witnessed via the Indian rupee (INR), India’s BSE SENSEX and 10-year government bond yields.
Though, a lack of major data and Thanksgiving Holiday in the US seems to restrict the market’s reaction to the news.
While the near-term impact of the catalyst is likely to remain less severe, this could derail the previously upbeat odds of a phase-one trade deal that has been fueling the US dollar (USD) off-late.
Technical Analysis
61.8% Fibonacci retracement of the current month rise around 71.20 limits the quote’s drop to 71.00 and 70.37/36 area including lows marked on August 08 and September 27. Meanwhile, a downward sloping trend line since November 14, around 71.75 can keep the prices under check ahead of highlighting 72.00 and monthly top near 72.40.
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