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USD/INR Defies Weak Private Sector Jobs Data to Inch Up

The US dollar returned to winning ways against the Indian Rupee in the early European session on Wednesday, with USD/INR up by 0.10% to trade at 83.46 at the time of writing. The US dollar is strengthened by Tuesday’s Factory orders figure, which increased by 1.4% month-over-month in February, exceeding the forecast estimate 1.1%.

However, the dollar’s upside is limited by a lower-than-expected JOLTs Jobs Openings figures for February. The reading came in at 8.756 million, marginally below the consensus forecast of 8.760 million. Furthermore, the January figure was revised downwards from 8.863 million to 8.748 million, adding to the downward pressure on the dollar.

Meanwhile, the Indian Rupee’s troubles piled up after the HSBC India Manufacturing PMI figure came short of projections. The March PMI reading came in at 59.1, missing the forecast 59.2. Nonetheless, the figure was a significant improvement from February’s 56.9.

Looking ahead, there’s much in store in the form of US dollar fundamentals. High-impact data will be coming in on Wednesday from ADP Nonfarm Employment Change, as well as the ISM and S&P Global services, manufacturing and composite PMI readings. These will bring new volatility into the USDINR market, ahead of a scheduled speech by Federal Reserve Chairman, Jerome Powell. On Tuesday, FOMC member Mary Daly stated that while three rate cuts are a reasonable target for 2024, there are no guarantees that they will come. Investors will be keen to pick more definitive cues on monetary policy direction from Powell.

Technical analysis

The momentum on the USD/INR trading pair favours control by the buyers. However, the buyers need to keep the rate above the 83.46 pivot to sustain the upside. The upward momentum will meet resistance at 83.50, but a continuation of control by the buyers could see them break above the resistance and test 83.54. Conversely, a move below 83.46 will signal control by the sellers, with support established at 83.43. A Continuation of control by the sellers at the pivot could build momentum to move lower to 83.39, invalidating the upside narrative.