• USD/INR snaps two-day south-run, bounces off monthly low.
  • Covid woes put a safe-haven bid under the US dollar.
  • Indian infections rise by 44,230, virus-led deaths jumped by 555.
  • US PCE Inflation, second-tier Indian data and risk catalysts should be watched for fresh impulse.

USD/INR picks up bids around 74.30, 0.08% intraday, ahead of Friday’s European session. Although the latest bounce off the monthly low favors the Indian rupee (INR) pair to print daily gains for the first time in three weeks, it remains on the two-week south-run by the press time.

While tracing the pair’s immediate rebound, the US dollar recovered from a one-month low, amid the coronavirus woes, which could be cited as the key catalyst. Also helping the counter-trend traders could be the market’s cautious sentiment ahead of the Fed’s preferred gauge of inflation, namely US Core Personal Consumption Expenditure Price Index for June.

Although India is luckily far from Japan and the US, the Asian nation’s latest covid numbers do give a wake-up call to the policymakers. As per the latest Health Ministry data, conveyed by Reuters, India reports 44,230 new covid-19 cases in the last 24 hours, taking a total to 31.57 million. Further, the death toll increased by 555 to 423,217 at the latest. Elsewhere, Japan posts record daily covid count and the US infections are also the highest since February.

On the other hand, US Q2 GDP backed the Fed’s resistance to discuss tapering but today’s inflation data may renew reflation fears as market consensus favors a 3.7% YoY figures versus 3.4% previous readouts. Furthermore, the US Senate talks over President Joe Biden’s infrastructures spending plan are also positive and suggests a further inflow of money, which in turn could bring additional inflation and urgency for the Fed to act.

The market plays back US Dollar Index (DXY) to snaps a four-day downtrend, up 0.05% around 91.96 by the press time. However, the US Treasury yields and stock futures, not to forget Asian stocks, are offered at the time of the press.

Given the risk-off mood favoring the USD/INR bulls, any further strengthening of the US data may extend the recovery moves. However, Indian infrastructure relating data and headlines affecting market sentiment, mainly relating to the covid and US stimulus, will also be important to watch for near-term direction.

Read: US Core Personal Consumption Expenditure Price Index June Preview: Bad will not be bad enough

Technical analysis

Unless breaking the late June’s swing lows, surrounding 74.00, USD/INR may again try to cross the 21-DMA level surrounding 74.55.

Additional important levels

Overview
Today last price 74.3275
Today Daily Change 0.0777
Today Daily Change % 0.10%
Today daily open 74.2498
 
Trends
Daily SMA20 74.5451
Daily SMA50 73.8802
Daily SMA100 73.7855
Daily SMA200 73.6182
 
Levels
Previous Daily High 74.4531
Previous Daily Low 74.2104
Previous Weekly High 75.0155
Previous Weekly Low 74.3213
Previous Monthly High 74.5135
Previous Monthly Low 72.4854
Daily Fibonacci 38.2% 74.3031
Daily Fibonacci 61.8% 74.3604
Daily Pivot Point S1 74.1557
Daily Pivot Point S2 74.0616
Daily Pivot Point S3 73.913
Daily Pivot Point R1 74.3985
Daily Pivot Point R2 74.5472
Daily Pivot Point R3 74.6413

 

 

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