The dollar weakened
following the CPI release but eventually recovered all the losses and strengthened
across the board. The Initial Claims remain
around the same low levels we got used to for years, but Continuing Claims dropped
to the lowest level since May.
The next
NFP report won’t have the shutdown related issues, so we will get a clearer
view of the US labour market conditions. The last intervention was
in October, but as it usually happens when the fundamentals remain against a
currency, the INR eventually fell to new lows.
We can expect the
Rupee to weaken again in the next months, but in the short-term, traders will
look for key technical breaks before piling into USDINR longs again.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily
chart, we can see that USDINR sold off from the upper bound of the rising
channel following the RBI’s intervention. The natural target
for the sellers remains the lower bound of the channel around the 89.00 level,
but they will need to keep the price below the key zones. The buyers, on the
other hand, will continue to step in around the key levels to keep targeting
new record highs.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour
chart, we can see that we have a strong resistance around the 90.40 level. The
sellers continue to step in there with a defined risk above the level to
position for a drop into the 89.70 level next
