- USD/INR forms a doji on daily sticks ahead of Fed interest rate decision.
- A test of 71.00 still likely amid Indian budget hopes and easing Coronavirus woes.
- Rebound in oil prices to cap the downside in the spot.
Amid easing worries over the China coronavirus outbreak on the Indian economy and hopes that the government will boost spending to revive growth, the Indian rupee trades close to a four-day high reached against its American rival on Wednesday.
USD/INR trades modestly flat near 71.22, having hit a new multi-day low at 71.18 in the last minutes. The rupee remains underpinned by increased expectations of an expansionary fiscal budget likely to be announced by the Indian government on Saturday.
According to the government sources and economists, India’s Cabinet Office is expected to raise spending on infrastructure and cut some personal tax in its 2020/2021 budget, to spur consumer demand and investment.
The USD/INR bears, however, lack momentum amid a solid rebound staged by oil prices. The black gold benefited from a surprise US crude inventory draw while re-assessment of the China coronavirus’ economic impact aided the recovery in oil. Note that India is heavily dependent on oil imports for its domestic consumption.
From a technical perspective, the spot has formed a Doji on the daily chart, suggesting sellers’ exhaustion. This could be also reflective of the fact that markets refrain from placing any directional bet on the pair ahead of the key Fed interest rate decision due later on Wednesday at 1900 GMT.
In the meantime, the spot will take cues from the US Goods Trade Balance, Pending Home Sales and broader market sentiment.
USD/INR Technical levels to consider
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0700 as USD gathers strength
EUR/USD continues to trade in negative territory below 1.0700 on Wednesday. Higher-than-expected increase in US JOLTS Job Openings for April provides a boost to the US Dollar and weighs on the pair as investors keep a close eye on US debt-limit news.
GBP/USD struggles to recover above 1.2400
GBP/USD has lost its traction and declined below 1.2400 after having climbed above that level earlier in the day. The pair struggles to gather recovery momentum as the US Dollar holds its ground after strong employment data. Markets await House vote on debt-limit bill.
Gold extends daily rebound beyond $1,970
Gold price has gained traction and advanced above $1,970 in the second half of the day on Wednesday. The benchmark 10-year US Treasury bond yield stays in negative territory and allows XAU/USD to keep its footing. Market mood remains cautious ahead of the debt-ceiling vote.
Ethereum holders pull $1 billion in ETH off exchanges hinting retail-led rally
Ethereum holdings in exchange wallets declined by $1.04 billion between May 8 and May 31. Interestingly, while large wallet investors have shed their Ether holdings, the altcoin got redistributed to addresses with less than 1 ETH.
C3.ai Stock News: After 33% rally, AI shares backtrack ahead of earnings
C3.ai (AI) stock slipped 7.6% to $41.62 in Wednesday’s premarket ahead of quarterly earnings expected after the close. This may just be traders taking profits after Tuesday’s 33.4% surge in the AI stock price.