USD/INR takes the bids to 71.75 ahead of India GDP
- USD/INR holds firm amid trade-led risk-on ahead of key growth data from India.
- The US second-tier data and trade/political news will also entertain investors.
Despite failing to rise beyond the yearly top, flashed early-week, USD/INR remains positive while trading near 71.75 ahead of the Europe markets open on Friday.
The underlying sentiment recently gained momentum as the US-China trade war seems to near a breakthrough after China stepped back from fresh levies ahead of the September meeting. Also adding to the optimism is risk-on mood amid the Asian equities and recovery of the US Treasury yields.
However, buyers are still worried near 10-month high as forecasts concerning India’s Gross Domestic Product (GDP) figures for Q2 19 (Q1 FY 19/20) flash downbeat signals.
TD Securities anticipate further slowdown in Indian GDP figures to a 5.6% y/y (market expectations 5.7%) figure following a 5.8% y/y increase in the previous quarter. Additionally, global rating agency Fitch also downgraded the Asian economy’s growth forecast for the year 2019/20 to a six-year low of 6.7% versus previous expectations of 7.3%.
Other than Indian GDP, second-tier data like Personal Income/Consumption, Chicago Purchasing Managers’ Index and Michigan Consumer Sentiment Index from the United States (US) could also direct near-term USD/INR moves. Also in the spotlight will be any news/headlines concerning the US-China trade relations.
Technical Analysis
While 21-day simple moving average (DMA) level of 71.30 acts as immediate support before drawing traders’ attention to 71.00, an upside clearance of 72.38 will extend pair’s run-up to December 2018 high near 72.82.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
