USD/INR stays below 71.00 as bulls and bears jostle over US-China trade relations

  • USD/INR fails to excite bears despite the phase-one deal between the US and China.
  • Traders seem to shrug off the Indian government’s likely relief in the upcoming budget.
  • Doubts over the future of US-China trade relations, Indian government policies keep the pair trapped below 71.00.

USD/INR trades near 70.78, after repeated failures to take-out 71.00, during the pre-European session on Thursday. The pair fails to portray optimism surrounding the US-China trade deal and the Indian government’s expected policy measures amid skepticism.

The US and China have finally managed to sign the phase-one of the trade deal that includes China’s promise of $200 billion worth of trade balance reduction with the US and Washington cutting off Beijing from the currency manipulator risk among many clauses. However, popular media, including Financial Times (FT) and Reuters, release the terms of the deal that pours cold water on the face of US-China trade optimists.

At the domestic front, the Indian government is considering to remove the tax on long-term capital gains (LTCG) introduced amid much criticism in the FY19 budget. The Bharatiya Janta Party (BJP) ruled government also showed the intention to announce production-linked incentives (PLI) to Smartphone makers to take some chunk from China and Malaysia.

With this, the US 10-year treasury yields and most markets in Asia, including India’s own, register mild gains amid doubts over the future.

Investors will now look forward to the US Retail Sales data for November for fresh impulse. However, the US-China trade updates, as both the sides have already begun phase-two talks, will keep the driver’s seat.

Technical Analysis

The pair is less likely to register major moves unless clearing either a 200-day SMA level of 70.50 or 71.00 round-figure.

Additional important levels

Today last price 70.766
Today Daily Change 0.0210
Today Daily Change % 0.03%
Today daily open 70.745
Daily SMA20 71.2607
Daily SMA50 71.3522
Daily SMA100 71.2689
Daily SMA200 70.4972
Previous Daily High 71.14
Previous Daily Low 70.6825
Previous Weekly High 72.57
Previous Weekly Low 70.8485
Previous Monthly High 71.98
Previous Monthly Low 70.328
Daily Fibonacci 38.2% 70.8573
Daily Fibonacci 61.8% 70.9652
Daily Pivot Point S1 70.5717
Daily Pivot Point S2 70.3983
Daily Pivot Point S3 70.1142
Daily Pivot Point R1 71.0292
Daily Pivot Point R2 71.3133
Daily Pivot Point R3 71.4867



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