• USD/INR retreats from intraday high but stays firmer around all-time high marked on Monday.
  • India inflation is expected to jump to 18-month high amid firmer fuel, food prices.
  • US inflation failed to propel yields, market sentiment dwindles on mixed clues.
  • RBI’s surprise rate hike already signalled higher price pressure, softer number can help INR pare recent losses.

USD/INR portrays the typical pre-data anxiety by retreating from the intraday top to 77.45 amid the mid-Asian session on Thursday. In doing so, the Indian rupee (INR) pair remains on the back foot around the record top, marked on Monday, with eyes on India's inflation data for April, amid expectations of witnessing 18-month high figures.

Although the market forecasts a 7.5% YoY print of India Consumer Price Index (CPI) for April, versus 6.95% prior, traders appear cautious as the Reserve Bank of India (RBI) has already announced 40 basis points (bps) of a rate hike to surprise the market earlier in the month. As result, traders would seek anything above the expectations to mark a notable move.

On Wednesday, much-awaited US Inflation data rose past market consensus but the traders sought solace in softer-than-previous releases. That said, the headline Consumer Price Index (CPI) rose to 8.3% YoY versus 8.1% expected and 8.5% prior. More importantly, the CPI ex Food & Energy, better known as Core CPI, crossed 6.0% forecasts with 6.2% annual figures, versus 6.5% previous readouts.

With this in mind, Reuters said, “Downward pressure on the INR will increase due to a broadly stronger U.S. dollar, higher oil prices and the threat to India's nascent economic recovery from higher interest rates. With the RBI apparently keen to control excessive INR depreciation, choppy trading is likely.”

It’s worth noting that foreign fund outflow and the broad US dollar strength, amid Fed’s 50 bps rate hike keep USD/INR buyers hopeful. “Foreigners have sold a net $19 billion of domestic shares year-to-date and a net $579.10 million of debt in May as investors exit Indian and other emerging markets,” per Reuters.

Also weighing on the USD/INR prices is the latest indecision among the traders, even as stock futures print mild gains and the yields are down. That said, China’s readiness to form policies to better counter the covid woes also underpins the latest cautious optimism and so should recently mix Fedspeak.

Moving on, India inflation will be crucial for USD/INR traders while weekly prints of the US Jobless Claims and monthly Producer Price Index (PPI) will also decorate today’s calendar.

Technical analysis

Bearish RSI divergence and repeated failures to cross a five-month-old ascending resistance line, near 77.55 by the press time, keep USD/INR sellers hopeful of a pullback towards March’s high near 77.17.

Additional important levels

Overview
Today last price 77.4615
Today Daily Change 0.0388
Today Daily Change % 0.05%
Today daily open 77.4227
 
Trends
Daily SMA20 76.5892
Daily SMA50 76.3197
Daily SMA100 75.5343
Daily SMA200 75.0194
 
Levels
Previous Daily High 77.481
Previous Daily Low 77.1552
Previous Weekly High 77.0548
Previous Weekly Low 75.9846
Previous Monthly High 77.0715
Previous Monthly Low 75.2634
Daily Fibonacci 38.2% 77.3566
Daily Fibonacci 61.8% 77.2797
Daily Pivot Point S1 77.225
Daily Pivot Point S2 77.0272
Daily Pivot Point S3 76.8992
Daily Pivot Point R1 77.5507
Daily Pivot Point R2 77.6787
Daily Pivot Point R3 77.8765

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD bulls seek a break of 0.6925 for 0.6950 target area

AUD/USD bulls seek a break of 0.6925 for 0.6950 target area

AUD/USD is consolidated at the start of the Asian day following some back and forth at the start of the week. The Aussie is trading at 0.6922 and will be dependent on the trajectory of the greenback in the absence of domestic data this week other than Retail Sales tomorrow. 

AUD/USD News

EUR/USD retreats from fortnight high near 1.0600 on recession/inflation fears

EUR/USD retreats from fortnight high near 1.0600 on recession/inflation fears

EUR/USD holds onto the pullback from a two-week high as bulls get rejections from short-term key resistances, as well as risk-off mood, during Tuesday’s Asian session. The major currency pair remains pressured around 1.0585.

EUR/USD News

Gold sees downside below $1,820, focus shifts to Fed Powell

Gold sees downside below $1,820, focus shifts to Fed Powell

Gold price displayed a failed attempt to sustain above the critical resistance of $1,840.00 on Monday. The precious metal has turned sideways after a sheer downside move and is expected to extend its losses after violating the crucial support of $1,820.85.

Gold News

Terra’s LUNA price finally shows the buy signal you’ve been waiting for

Terra’s LUNA price finally shows the buy signal you’ve been waiting for

Terra’s LUNA price shows optimism to start the final week of June. The potential for a new bull run is beginning to materialize. LUNA price sees an uptick in social media commentary.
 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures