#USDINR @ 81.8100 has shown a rebound move as the USD Index has gauged an intermediate cushion around 100.50. (Pivot Orderbook analysis)

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• USD/INR has shown a rebound move as the USD Index has gauged an intermediate cushion around 100.50.
• Fresh signals of a decline in inflation projections indicate that the Fed might pause the rate hike cycle.
• The Indian government has trimmed its fiscal deficit target to 5.9% of GDP below the prior target of 6.4%.

The pair currently trades last at 81.8100.

The previous day high was 82.0409 while the previous day low was 81.5032. The daily 38.2% Fib levels comes at 81.7086, expected to provide support. Similarly, the daily 61.8% fib level is at 81.8355, expected to provide resistance.

The USD/INR pair has rebounded after dropping to near 81.65 in the Asian session. The asset has found demand as the US Dollar Index (DXY) has shown signs of a pullback move after refreshing its nine-month low at 100.50. The USD Index is still in an extremely negative trajectory, therefore, the pullback move could be capitalized as a selling opportunity by the market participants.

S&P500 futures are holding the majority of their extra gains recorded in the Tokyo session above the stellar gains recorded on Wednesday, portraying that the risk-appetite theme is extremely solid. The demand for US government bonds is declining, which has pushed 10-year US Treasury yields above 3.41%.

In its interest rate decision, the Federal Reserve (Fed) slowed down its policy tightening pace again to 25 basis points (bps) after slowing it already to 50 bps in December’s meeting. Fed chair Jerome Powell has confirmed that the policy tightening cycle will continue for now as the central bank wants to strengthen itself in the battle against inflation. While the street is expecting that the Fed might pause its interest rate hiking spree due to the availability of various evidence of further inflation softening.

On the Indian rupee front, Union Budget presented by Finance Minister Nirmala Sitharaman failed to provide strength to the Indian equities. According to the Fiscal Budget 2023-24, the administration has increased the scale of tax slabs, which will support individuals having annual earnings up to Rs. 7 lakhs. Apart from that, the government has trimmed the Fiscal Deficit target to 5.9% of the Gross Domestic Product (GDP) from the 6.4% announced in the prior period. A lower fiscal deficit target might strengthen the Indian Rupee ahead.

Meanwhile, the oil price has turned sideways after a recovery move from below $76.50. On Wednesday, the oil price plunged after the United States Energy Information Administration (EIA) reported a build-up of oil stockpiles by 4.14M for the week ending January 27. It is worth noting that India is one of the leading importers of oil and lower oil price support the Indian rupee.

Technical Levels: Supports and Resistances

USDINR currently trading at 81.8305 at the time of writing. Pair opened at 81.7654 and is trading with a change of 0.08 % .

The pair is trading above its 20 Daily moving average @ 81.6004, below its 50 Daily moving average @ 82.0555 , below its 100 Daily moving average @ 81.8841 and above its 200 Daily moving average @ 80.2836

The previous day high was 82.0409 while the previous day low was 81.5032. The daily 38.2% Fib levels comes at 81.7086, expected to provide support. Similarly, the daily 61.8% fib level is at 81.8355, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 81.4988, 81.2322, 80.9611
• Pivot resistance is noted at 82.0365, 82.3075, 82.5742

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