#USDINR @ 79.6430 fades bounce off two-week low amid pre-NFP anxiety. (Pivot Orderbook analysis)

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• USD/INR fades bounce off two-week low amid pre-NFP anxiety.
• Moody’s cut India’s growth forecast for 2022, yields favor DXY strength.
• Rebound in oil prices jostle with RBI’s defensive play to add to the trading filters.
• US jobs report bears downbeat forecasts for August, tests pair buyers.

The pair currently trades last at 79.6430.

The previous day high was 79.8375 while the previous day low was 79.3. The daily 38.2% Fib levels comes at 79.6322, expected to provide support. Similarly, the daily 61.8% fib level is at 79.5053, expected to provide support.

USD/INR retreats towards 79.50 during Friday’s Asian session, fading the bounce off a fortnight low, as traders await the US Nonfarm Payrolls (NFP) amid a light calendar and mixed clues. That said, the market’s consolidation also underpinned the quote’s latest pullback.

It’s worth noting, however, that the global rating giant Moody’s raised concerns over India’s growth and challenge the USD/INR bears. “Moody’s on Thursday sharply lowered India’s economic growth forecast for 2022 to 7.7% from 8.8% estimated earlier, citing monetary policy tightening, uneven distribution of monsoon rains and slowing global growth,” stated Reuters while quoting Mint.

Also likely to challenge the USD/INR sellers is the recent rebound in the WTI crude oil prices, up 2.15% to $88.00 by the press time. The black gold dropped during the last three days but the latest chatters surrounding Iran and output cut seemed to have triggered the commodity’s rebound.

Also read: WTI rebounds from fortnight low towards $87.50 on Iran, OPEC+ chatters

Additionally, firmer US data and hawkish Fedspeak joined pessimism surrounding China to underpin the bullish bias for the USD/INR pair. US ISM Manufacturing PMI reprinted the 52.8 figure for August versus the market expectations of 52.0. Further, the final reading of S&P Manufacturing PMI for August rose past 51.3 initial estimates to 51.5, versus 52.2 prior final for July. On the same line, US Initial Jobless Claims dropped to 232K versus 248K forecast and 237K prior. Further, the Unit Labor Cost rose 10.2% QoQ during the second quarter (Q2) versus 10.7% expected while Labor Productivity dropped by 4.1% during Q2 versus the anticipated fall of 4.5% and -4.6% prior.

Atlanta Fed President Raphael Bostic said that the Fed has work to do with inflation, a ‘long way’ from 2%. Also, the newly appointed Dallas Fed President Lory Logan joined the lines of hawkish fellow US central bankers while saying, “Restoring price stability is No. 1 priority.”

A covid-led lockdown in China’s Chengdu city joins downbeat Caixin Manufacturing PMI to portray grim conditions for the world’s second-largest economy and weigh on the sentiment. On the same line could be the escalating geopolitical tension between Beijing and Washington, via Taiwan. Furthermore, Reuters unveiled news suggesting that US President Joe Biden’s curbs on chips to China are part of a broader effort.

Meanwhile, the Reserve Bank of India’s (RBI) defense of the domestic currency every time it hits the 80.00 threshold seemed to have joined the recently sluggish commodities to favor the USD/INR bears.

Looking forward, USD/INR traders should keep their eyes on the US Nonfarm Payrolls (NFP) and Unemployment Rate for August, expected 300K and 3.5% versus 528K and 3.5% respective priors, for fresh impulse amid mounting calls of recession and central bank aggression.

Although 50-day EMA restricts short-term USD/INR downside to around 79.40, the pair’s further advances need to be sustained daily closing beyond the 80.00 threshold to convince the bulls.

Technical Levels: Supports and Resistances

USDINR currently trading at 79.6378 at the time of writing. Pair opened at 79.6801 and is trading with a change of -0.05% % .

The pair is trading below its 20 Daily moving average @ 79.6501, above its 50 Daily moving average @ 79.466 , above its 100 Daily moving average @ 78.3906 and above its 200 Daily moving average @ 76.862

The previous day high was 79.8375 while the previous day low was 79.3. The daily 38.2% Fib levels comes at 79.6322, expected to provide support. Similarly, the daily 61.8% fib level is at 79.5053, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 79.3742, 79.0684, 78.8367
• Pivot resistance is noted at 79.9117, 80.1434, 80.4492

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