USD/INR drops to test key support near 71.50, US data in focus

Rupee tracks the yuan rise on fresh trade deal optimism.
Broad USD strength to keep the losses limited ahead of US Services PMIs?

Dhwani Mehta FXStreet

The USD/INR cross came under fresh selling pressure in the European session and hit fresh session lows of 71.57, having faced rejection near 71.80 region for the fourth straight session on Wednesday.

The rupee picked up fresh bids and bounced nearly 20-pips, as it tracked the sudden rally in the Chinese yuan. This last one was fuelled by a Bloomberg report saying that US and China are moving closer to agreeing on the number of tariffs that would be rolled back in phase-one trade deal despite tensions over Hong Kong and Xinjiang. The renewed US-China trade optimism offered fresh signs of life to the Asian currencies.

The latest leg in the spot appears limited, as broad-based US dollar strength could help cushion the downside. Further, expectations of a sixth rate cut this year by the Reserve Bank of India (RBI), in an effort to boost growth, are likely to keep the rupee gains in check. The two-day Reserve Bank of India (RBI) monetary policy review meeting has commenced earlier today, with the decision due on Thursday at 0615 GMT.

In the meantime, the trade-related news and US economic releases will offer fresh trading cues.

USD/INR Technical levels to consider

USD/INR

Overview
Today last price	71.60
Today Daily Change	-0.2065
Today Daily Change %	-0.29
Today daily open	71.786

Trends
Daily SMA20	71.6394
Daily SMA50	71.2426
Daily SMA100	71.0251
Daily SMA200	70.2405

Levels
Previous Daily High	71.826
Previous Daily Low	71.5275
Previous Weekly High	71.8815
Previous Weekly Low	71.2255
Previous Monthly High	72.37
Previous Monthly Low	70.4975
Daily Fibonacci 38.2%	71.712
Daily Fibonacci 61.8%	71.6415
Daily Pivot Point S1	71.6003
Daily Pivot Point S2	71.4147
Daily Pivot Point S3	71.3018
Daily Pivot Point R1	71.8988
Daily Pivot Point R2	72.0117
Daily Pivot Point R3	72.1973

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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