USD/INR: Rupee may gap higher on dovish Fed

USD/INR is likely to open on a negative note, tracking overnight losses in the US dollar.
Fed kept rates unchanged but cited high inflation as a prerequisite for rate hikes.

Omkar Godbole FXStreet Contributor

Indian Rupee (INR) is likely open higher on Thursday, tracking the overnight gains in the major currencies following the Federal Reserve's rate decision.

The US central bank kept rates unchanged at 1.5%-1.75% and signaled it would stand pat in 2020. Even so, markets offered US dollars, possibly due to comments by President Powell that rates would be hiked only if there a persistent rise in inflation.

EUR/USD rose above key resistance at 1.1116, confirming a bullish breakout. The British Pound and the Japanese Yen also gained ground against the greenback. Notably, GBP/USD is currently trading at fresh nine-month highs near 1.3225.

AUD/USD and NZD/USD are also better bid at press time, having gained 1% and 0.62%, respectively on Wednesday.

As a result, Rupee is likely to open on a positive note, pushing USD/INR to levels below 70.60. The downside momentum may weaken if Yuan continues to lose ground on trade tensions. The Chinese currency has not benefitted much from the Fed's dovish tone. At press time, the USD/CNH pair (offshore Yuan) is sidelined around 7.0267.

Technical levels

With the daily chart reporting a downside break of an ascending trendline and bearish readings on key indicators, the currency pair looks set to test support at 70.31 (Nov. 1 low).

USD/INR

Overview
Today last price	70.6725
Today Daily Change	-0.0344
Today Daily Change %	-0.05
Today daily open	70.7069

Trends
Daily SMA20	71.5153
Daily SMA50	71.2613
Daily SMA100	71.1568
Daily SMA200	70.2505

Levels
Previous Daily High	71.025
Previous Daily Low	70.328
Previous Weekly High	71.98
Previous Weekly Low	71.1775
Previous Monthly High	72.37
Previous Monthly Low	70.4975
Daily Fibonacci 38.2%	70.5943
Daily Fibonacci 61.8%	70.7587
Daily Pivot Point S1	70.3483
Daily Pivot Point S2	69.9896
Daily Pivot Point S3	69.6513
Daily Pivot Point R1	71.0453
Daily Pivot Point R2	71.3836
Daily Pivot Point R3	71.7423

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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