KEY POINTS
- Indian Rupee fell to a new record low
- US-India trade talks ongoing
- India inflation data to be released tomorrow
FUNDAMENTAL OVERVIEW
The USD weakened across all the major currencies following
the Fed’s decision as the central bank communicated a higher bar for further
rate cuts, but Fed Chair Powell delivered a more dovish message by downplaying inflation
risk and focusing more on the labour market. Despite that, the INR fell into new record lows
against the US dollar as the structural headwinds keep the pair in a bullish
trend.
We have US-India trade talks underway in New Delhi at
the moment, and although a trade deal is still seen some distance away, India
is hoping to seal at least a basic framework before year-end. That could give
the Indian Rupee some relief although it wouldn’t change the big picture trend. In case, we get some negative news, then the INR will likely fall some more.
USDINR TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that USDINR has been
trading in a rising channel, with the price getting closer to the upper bound
of the channel around the 91.00 level. If the price gets there, we can expect
the sellers to step in with a defined risk above the top trendline to position
for a pullback into the lower bound of the channel. The buyers, on the other
hand, will look for a break higher to increase the bullish bets into new record
highs.
USDINR TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see that the pair rose into
a new record high before pulling back a bit. The sellers will likely step in
here with a defined risk above the recent high to target a pullback into the
89.70 support. The buyers, on the other hand, will want to see the price
breaking higher to increase the bullish bets into the 91.00 level.
USDINR TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see that the break above
the minor resistance zone around the 90.05 level increased the momentum as more
buyers piled in to target new record highs. If we get a pullback, the buyers
will be looking for dip-buying opportunities around the 90.05 level and the 89.70
support
