USD/INR seesaws around 21-day EMA amid trade/political fears


  • USD/INR initial dropped to 21-day EMA but is now witnesses a pullback.
  • Broad USD weakness confronts the trade/political pessimism.
  • RBA is expected to announce another rate cut on Thursday.

The USD/INR pair’s initial declines to 21-day Exponential Moving Average (EMA) fails to last long as the quote recovers to 71.62 amid the initial hours of the Indian trading session on Tuesday.

Monday’s broad US dollar’s (USD) weakness and traders’ pricing for the Reserve Bank of India’s (RBI) rate cut seem to exert downside pressure on the pair. On the contrary, the United States (US) driven challenges to the global trade mechanism, via threats to tariffs on the European Union (EU), China and South American nations, keep the prices under check. Additionally, China’s retaliation to the Hong Kong Act, via threats of banning diplomatic entry and sanctioning Non-Government Organization, added fears to the market sentiment.

Risk tone stays on the back foot with the US 10-year treasury yields seesaws near 1.83% and S&P 500 Futures cheering the announcement from the Japanese announcement concerning the economic stimulus package.

It’s worth mentioning that the recently downbeat growth figures push the Indian central bank to announce another rate cut, following a no rate change in November and a fifth consecutive rate reduction in October. However, not all is bad as inflation figures have started responding to the government’s fiscal measures and readiness to boost foreign investment limits.

While no major data is up from either the US or India ahead of Thursday’s RBI meeting, Friday’s US employment figures could drive markets afterward. Though, one shouldn’t undermine the trade/political headlines’ ability to move the pair.

Technical Analysis

Pair’s break below 21-day EMA level of 71.53 can drag it back to 61.8% Fibonacci retracement of November month upside, near 71.20, whereas buyers will avoid entry unless clearing 23.6% Fibonacci retracement, around 71.93.

additional important levels

Overview
Today last price 71.6198
Today Daily Change -0.0141
Today Daily Change % -0.02%
Today daily open 71.6339
 
Trends
Daily SMA20 71.5895
Daily SMA50 71.2262
Daily SMA100 70.994
Daily SMA200 70.2363
 
Levels
Previous Daily High 71.945
Previous Daily Low 71.5885
Previous Weekly High 71.8815
Previous Weekly Low 71.2255
Previous Monthly High 72.37
Previous Monthly Low 70.4975
Daily Fibonacci 38.2% 71.7247
Daily Fibonacci 61.8% 71.8088
Daily Pivot Point S1 71.4999
Daily Pivot Point S2 71.366
Daily Pivot Point S3 71.1434
Daily Pivot Point R1 71.8564
Daily Pivot Point R2 72.079
Daily Pivot Point R3 72.2129

 

 

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