USD/INR choppy trade may continue

In today's first Presidential election debate clearly President Trump underperformed and the outcome was in line with what market had expected. The Democratic nominee Biden continued to sway against Trump but there were no fireworks as such from the debate and we didn't see much reaction on USDINR spot. Post the debate, according to the US National polls, Biden has a significant advantage and is leading by nearly 60% while Trump by 25%. The debate influence will be likely seen on the markets by late Tuesday or early Wednesday.

Now the market focus will be on  the fiscal stimulus package, and it seems that we can expect a delay in the rollout. Last night US House Speaker Nancy Pelosi said that she hoped to have a coronavirus aid deal with the White House this week, after speaking with Treasury Secretary Mnuchin and making plans for further talks on Wednesday. On Monday, Pelosi had said that Democratic lawmakers unveiled a new $2.2 trillion fiscal stimulus bill, but in an interview with CNBC, White House economic adviser Larry Kudlow made clear that the White House still views the updated figure as too high. It may happen that before the elections, the US Congress may pass any stimulus package, because it is vital to support the pandemic-stricken economy. So it means there is scepticism over the passage of US fiscal stimulus package and any further delay can surge the USDINR pair.

The USDINR spot managed to end the month of September with marginal gains, by appreciating 0.2% after falling for three consecutive months. Technically, strength above 74.05 will extend the current bounce in the pair towards next major resistance between 74.40 -74.62 zones. But we can witness fresh selling as prices test the resistance areas.

Meanwhile, areas around 73-73.20 are crucial support where intra-month dips should find buying. A decisive break below this level will trigger a retest of 72.65 and targets of 72.35/72.18 will open up if the pair trades below 72.60 consistently.