USD/INR rebounds from key support near 71.40, will it last?
- Rupee eases from two-week highs amid trade deal hopes, higher oil prices.
- The USD/INR bounce to be capped by rising FI inflows.
- All eyes on US macro data dump amid ongoing trade developments.
The USD/INR pair reverses early loses, after having hit two-week lows at 71.405 in the opening trades. At the press time, the cross trades near 71.47 levels, almost unchanged on the day.
The pullback in the spot can be mainly attributed to the resurgent demand for the US dollar across the board, as the US Treasury yields are recovering on the back of increased expectations that a US-China trade deal will be soon clinched. The US dollar index is back on the bids and remains within a striking distance of the weekly tops of 98.38 reached on Monday.
Further, the surge in oil prices overnight seems to have weighed on the Indian rupee, lending some support to the USD/INR bulls. It's worth noting that India is an oil-importing nation and rising oil prices have a major bearing on the country’s Balance of Payments (BoP).
However, the retreat in the rupee from two-week tops vs. the greenback could be limited, as rising Foreign Investment (FI) inflows in India will continue to keep the sentiment somewhat underpinned.
Looking ahead, the USD price-action will continue to influence the pair, as markets await fresh updates on the likely US-China trade deal and a fresh batch of US growth and spending numbers heading into Thursday’s Thanksgiving thin trading.
USD/INR Technical levels to consider
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.
