The
bearish positioning in the US dollar remains crowded, so it’s hard to see much
more weakness unless the data deteriorates significantly or we get some kind of
negative shock in the economy. This week, all the important stuff will be
released on Friday as we get the US Flash PMIs and the US Q4 GDP. We might also
get the US Supreme Court decision on Trump’s tariffs.
INR:
The Indian Rupee remains
on a bearish structural trend against the US Dollar, but the recent positive
developments on the tariffs and inflation front gave the INR a boost. In fact, the
US and India finally reached a trade deal and President Trump announced that he
will lower the tariffs from 25% to 18%.
The RBI held
interest rates steady at the last meeting and last week we saw inflation rising
to 2.75% in January from 1.33% in December. This should push rate cuts aside
for the time being as inflation is now inside the 2-6% tolerance band of the 4%
target.
If the US Supreme
Court rules against Trump’s tariffs we could see another strong rally in the
Indian Rupee. On the other hand, if the Court were to keep the tariffs in
place, nothing should change as the market has already adjusted to the tariffs.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily
chart, we can see that USDINR is consolidating at the lower bound of the channel as the dip-buyers
continue to step in to position for a rally into the upper bound of the channel
around the 93.00 handle. The sellers will want to see the price breaking lower
to open the door for new lows with the 89.50 level as the first target.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour
chart, we can see that the price broke above the downward trendline recently
but couldn’t extend above the strong resistance zone around the 91.00. The
buyers will want to see the price breaking higher to increase the bullish bets
into the upper bound of the channel. The sellers, on the other hand, will continue
to step in around the resistance with a defined risk above it to target a break
below the lower bound of the channel.
USDINR TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, there’s not much we can add here as the sellers will likely continue to
step in around the resistance, while the buyers will look for a break higher to
increase the bullish bets into new highs. Tomorrow, we get the latest US
Jobless Claims figures
