USDINR sellers poke one-week-old support line amid sluggish markets. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• USDINR sellers poke one-week-old support line amid sluggish markets.
• PBOC moves, pre-NFP consolidation allowed Asian markets to remain mildly bid.
• US dollar needs strong jobs report to defend the biggest weekly gains in seven.

The pair currently trades last at 82.6575.

The previous day high was 83.187 while the previous day low was 82.682. The daily 38.2% Fib levels comes at 82.8749, expected to provide resistance. Similarly, the daily 61.8% fib level is at 82.9941, expected to provide resistance.

USDINR remains depressed around 82.65, down for the second consecutive day, as traders await the all-important US jobs report during early Friday.

In doing so, the Indian Rupee (INR) pair also benefits from the US dollar’s retreat ahead of the key Nonfarm Payrolls (NFP). Further, the People’s Bank of China’s (PBOC) efforts to defend the Chinese Yuan (CNY) join the broad optimism in Asia to also favor the USD/INR pair sellers of late.

However, firmer Treasury yields and hawkish Fed bets keep the pair buyers hopeful. On the same line could be the recently firmer Oil price, which in turn has inverse relations with the INR due to India’s reliance on energy imports and a record deficit. Furthermore, covid woes in China and fears of recession elsewhere, as well as the hawkish Fed, tease the USDINR bears.

On Thursday, the USDINR pair initially rose to the highest levels in three weeks before retreating from 83.18. The pullback moves could be linked to the market’s optimism after the Reserve Bank of India’s (RBI) inflation talks. “The Reserve Bank of India’s monetary policy committee met on Thursday to discuss the bank’s report to the government for having failed to meet its inflation targets for three straight quarters for the first time since it was set up in 2016,” said Reuters. The news also mentioned that India’s central bank will not immediately release details of the report to the government, Governor Shaktikanta Das said.

Elsewhere, US ISM Services PMI for October dropped to 54.4 from 56.7 prior and 55.5 market consensus. However, the Factory Orders matched 0.3% forecast versus 0.2% upwardly revised previous readings. It should be noted that the US S&P Global Composite PMI and Services PMI got an upward revision from their preliminary readings for the stated month whereas the Initial Jobless Claims eased to 217K for the week ended on October 28 versus 220K expected and 218K prior. On the other hand, US inflation expectations, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, dropped to the lowest levels since October 19 and 13 in that order.

Amid these plays, the Wall Street benchmarks closed in the red while the US 10-year Treasury yields refreshed a one-week high to 4.22% before retreating to 4.15%. Notably, the US 2-year bond coupons rose to the highest levels since 2007. It should be noted that the S&P 500 Futures remain indecisive while the yields are sidelined at the latest, which in turn portrays the sluggish markets and allow USDINR to remain weak.

Moving on, the US jobs report for October will be crucial for near-term directions. Forecasts suggest that the headline US Nonfarm Payrolls (NFP) could ease to 200K in October from 263K prior while the US Unemployment Rate may increase to 3.6% from 3.5% prior.

Bearish MACD signals join the RSI (14) retreat to favor the USDINR sellers in breaking the 82.60 support, comprising an ascending trend line from October 27. However, the late October swing low near 81.90 appears a tough nut to crack for the pair sellers. That said, recovery needs a daily closing beyond 83.00 to convince buyers.

Technical Levels: Supports and Resistances

USDINR currently trading at 82.6575 at the time of writing. Pair opened at 82.7 and is trading with a change of -0.05% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 82.5113, 50 SMA 81.2449, 100 SMA @ 80.2703 and 200 SMA @ 78.3172.

The previous day high was 83.187 while the previous day low was 82.682. The daily 38.2% Fib levels comes at 82.8749, expected to provide resistance. Similarly, the daily 61.8% fib level is at 82.9941, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 82.5257, 82.3513, 82.0207
• Pivot resistance is noted at 83.0307, 83.3613, 83.5357

[/s2If]
Join Our Telegram Group