USD/INR: Rebound stalls just below 71.00, focus on US CPI

USD/INR's upside capped, as INR draws support from Yuan.
The rupee weakened on rising stagflation risks in India.
The US dollar rebounds ahead of the US inflation data.

Dhwani Mehta FXStreet

Amid rising stagflation risks in India and fresh broad-based US dollar buying, USD/INR staged a solid comeback from five-week lows of 70.71 reached in the overnight trades. At the press time, the spot trades at 70.93, having stalled the rebound just below the 71 handle.

The further recovery in the pair appears capped, as the Indian rupee continues to draw support from its Asian peers, the Chinese yuan, which rallied hard on the US’ goodwill gesture ahead of the US-China phase one trade deal signing on Wednesday. US to remove 'currency manipulator' tag on China ahead of the phase-one deal

The Indian rupee’s upside lost legs over the last hours after the Indian Whole Price Index (WPI) accelerated to 2.59% in December. India’s retail price index jumped to 65-month highs in December. Rising price pressures combined with slowing GDP growth poses a stagflation threat to India’s economy.

Meanwhile, a fresh buying wave seen in the US dollar across its main competitors lifted the cross from multi-week troughs, as the bulls now gather pace for a break above the 71 handle.

That is likely if the US dollar extends the recovery gains on above-forecast US CPI data due to be reported at 1330 GMT in the NA session. The US CPI is seen rising to 15-month highs of 2.3% YoY in Dec from 2.1% previous.

USD/INR Technical levels to consider

USD/INR

Overview
Today last price	70.8956
Today Daily Change	0.1627
Today Daily Change %	0.23
Today daily open	70.7305

Trends
Daily SMA20	71.2802
Daily SMA50	71.3565
Daily SMA100	71.2862
Daily SMA200	70.4809

Levels
Previous Daily High	71
Previous Daily Low	70.643
Previous Weekly High	72.57
Previous Weekly Low	70.8485
Previous Monthly High	71.98
Previous Monthly Low	70.328
Daily Fibonacci 38.2%	70.7794
Daily Fibonacci 61.8%	70.8636
Daily Pivot Point S1	70.5823
Daily Pivot Point S2	70.4342
Daily Pivot Point S3	70.2253
Daily Pivot Point R1	70.9393
Daily Pivot Point R2	71.1482
Daily Pivot Point R3	71.2963

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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