January 24, 2023
New Delhi, India
The USD/INR currency pair is maintaining a stable stance despite global uncertainties, with India’s economic resilience acting as a counterbalance. In this analysis, we delve into the various factors influencing the forex market and the technical landscape of USD/INR.
Indian Economy Defies Global Trends:
Despite challenges worldwide, India’s stock market has risen to become the fourth-largest globally, boasting a market capitalization of $4.3 trillion. The National Statistics Office projects a 7.3% growth in India’s GDP for the current financial year, solidifying its position as the fastest-growing major economy.
USD/INR Flat Amid Global Developments:
The USD/INR pair continues to trade flat, resisting the pressure from a stronger US Dollar and higher US yields. Investors are closely watching the US S&P Global Purchasing Managers’ Index (PMI) report for potential market cues, while also considering upcoming US economic indicators.
Federal Reserve’s Influence on Market Sentiment:
The market sentiment is shaped by the Federal Reserve’s stance on rate cuts. Despite a negative reading in the US Richmond Fed Manufacturing Index, the market has adjusted its expectations for rate cuts from 175 to 125 basis points in 2024. Federal Reserve officials emphasize a careful and methodical approach to rate adjustments.
Technical Analysis Points to Key Levels:
Technically, the USD/INR pair remains within a range of 82.80–83.40 since September 2023. The 100-period Exponential Moving Average (EMA) provides support, and the 14-day Relative Strength Index (RSI) suggests a favorable environment for buyers. Key resistance levels are identified at 83.40, 83.47, and 84.00, while support levels lie at 83.00, 82.80, and 82.60.
In conclusion, the USD/INR pair’s flat trading is a result of the delicate balance between global economic factors and India’s robust economic performance. Traders are closely monitoring technical levels and key economic indicators, awaiting potential shifts in market dynamics.
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