January 29, 2023
New Delhi, India
The USD/INR pair is on a positive trajectory in the forex market, influenced by various factors leading into crucial events like the Federal Open Market Committee (FOMC) meeting and the release of India’s Interim Budget.
Factors Influencing USD/INR:
The Indian Rupee faces a mild negative bias amid the US Dollar’s rebound, fueled by strong economic data in the United States. Geopolitical tensions in the Middle East are also boosting demand for safe-haven currencies, providing a tailwind for USDINR.
FOMC Meeting Expectations:
Investors are closely watching the FOMC meeting on Wednesday, with expectations that interest rates will remain unchanged. Attention will shift to the post-meeting press conference, where any hints at a potential rate cut in March may impact the Greenback.
India’s Interim Budget 2024:
Scheduled for release on Thursday, India’s Interim Budget for fiscal year 2024-25 aims to steer the country towards a $5 trillion economy. The budget is anticipated to focus on key initiatives supporting India’s growth trajectory.
Budget and Economic Outlook:
India’s 10-year benchmark bond yield and government budget announcements play a crucial role in influencing the Indian Rupee’s sensitivity. The Fiscal Budget 2024-25 is expected to prioritize government spending while targeting a fiscal deficit reduction.
Technical Analysis of USD/INR:
Technically, the USD/INR pair is in a descending trend channel, but indicators like the 100-period Exponential Moving Average (EMA) and the Relative Strength Index (RSI) suggest potential upside. Resistance levels at 83.25, 83.35, and 83.47 are crucial, with support at 83.00-83.05, 82.90, and 82.72.
Traders are advised to monitor key levels as the USDINR pair navigates through significant events. The combination of fundamental factors and technical indicators suggests potential upside, emphasizing the need for caution and strategic decision-making.
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