#USDINR @ 82.6920 clings to mild gains during three-day winning streak. (Pivot Orderbook analysis)

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• USD/INR clings to mild gains during three-day winning streak.
• Risk aversion in Asia, overall cautious mood ahead of key data/events underpins US Dollar rebound.
• Softer India growth may allow RBI to defend status quo.
• US policymakers flag troubles for measures to avoid default in passing the Congress.

The pair currently trades last at 82.6920.

The previous day high was 82.8046 while the previous day low was 82.555. The daily 38.2% Fib levels comes at 82.7092, expected to provide resistance. Similarly, the daily 61.8% fib level is at 82.6503, expected to provide support.

USD/INR remains on the front foot for the third consecutive day even as it clings to mild gains around 82.70 amid early Wednesday in Europe. In doing so, the Indian Rupee (INR) pair not only justifies the US Dollar’s latest strength but also portrays the market’s cautious mood ahead of the Indian Gross Domestic Product (GDP) for the first quarter (Q1), as well as the US House voting on the debt-ceiling extension deal.

It’s worth noting that the US Dollar Index (DXY) picks up bids to reverse the previous day’s pullback from the 10-week high to around 104.25 as market sentiment sours on fears of economic slowdown, backed by Richmond Fed Thomas Barkin’s comments and recently downbeat China PMI. Also weighing on the sentiment, as well as underpinning the USD/INR run-up could be the anxiety ahead of the key data/events as the US Republicans show readiness to vote down the agreement to avoid the debt-ceiling expiration.

On the other hand, the risk-off mood in Asia, mainly due to China’s official PMI’s downbeat performance in May, as well as due to the US default woes, allows the Indian Rupee (INR) bears to keep the reins.

That said, the divergence between the Reserve Bank of India’s (RBI) monetary policy bias, considering the latest easy inflation, and the hawkish Federal Reserve (Fed) bets keeps the USD/INR buyers hopeful.

Alternatively, the recently softer WTI crude oil price, depressed near a three-week low surrounding $69.30 at the latest, puts a floor under the INR price. On the other hand, hopes that the US policymakers will be able to avoid the default prod the US Dollar bulls, especially amid mixed data. That said, the US Conference Board’s (CB) Consumer Confidence Index edged lower to 102.30 for May from an upwardly revised 103.70 prior marked in April (from 101.30). Additional details of the survey report mentioned that the one-year consumer inflation expectations ticked down to 6.1% in May from 6.2% in April. Further, the Dallas Fed Manufacturing Business Index for May dropped to -29.1 from -23.4 and versus -19.6 market expectations.

Against this backdrop, the S&P500 Futures remain indecisive, mildly offered around 4,220 by the press time, after a mixed Wall Street close whereas the US Treasury bond yields stay depressed of late.

Looking forward, USD/INR pair traders will pay attention to India’s Q1 GDP, expected to improve to 5.0% YoY versus 4.4% prior, ahead of the US House voting on the measures to avoid the disastrous failure in paying the government’s debts. Should the Indian growth numbers appear positive, the RBI may get one more reason, in addition to softer inflation, to keep the monetary policy unchanged, which in turn may propel the pair after an initial setback.

A sustained run-up beyond a downward-sloping resistance line from October 2022, around 82.82 by the press, becomes necessary for the USD/INR bulls to keep the reins. That said, a convergence of the 50-DMA and 100-DMA, around 82.17-15 at the latest, appears a tough nut to crack for the Indian Rupee buyers.

Technical Levels: Supports and Resistances

USDINR currently trading at 82.7025 at the time of writing. Pair opened at 82.6794 and is trading with a change of 0.03% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 82.3509, 50 SMA 82.1543, 100 SMA @ 82.1612 and 200 SMA @ 81.8843.

The previous day high was 82.8046 while the previous day low was 82.555. The daily 38.2% Fib levels comes at 82.7092, expected to provide resistance. Similarly, the daily 61.8% fib level is at 82.6503, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 82.5547, 82.4301, 82.3052
• Pivot resistance is noted at 82.8043, 82.9292, 83.0538

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