USDINR rebound today after four consecutive trading session of loses as the risk-off sentiment today shift investors attention to safe-haven US dollar. Indian Rupee gained momentum amid hopes of the coronavirus vaccine and the reopening of the global economy.
The economic activity in India remains weak, and the country might experience a 6.1% to 7% contraction in GDP for the full year 2020. Despite the current economic and health crisis economists believe that the current downturn is only a temporary phase as the country remains the fastest growing economy in the world, and is still a favourable investment destination.
The Reserve Bank in an emergency meeting on May 22 cut the interest rate by 40 basis points to 4%, in an attempt to offset the COVID-19 impact on the economy. The central bank of India has cut interest rates by 1.15% since the beginning of the coronavirus crisis, and many analysts believe that this is not yet the end of the easing cycle. RBI would continue the accommodative stance of monetary policy, aiming to achieve the inflation target of 4% while supporting economic growth.
USDINR Price Technical Analysis
USDINR is 0.05% higher at 74.416 as the pair rebounds from two-week lows reversing the recent downtrend that started after the pair breached below the 100-day moving average. The technical outlook remains bearish for the short term, and a break below the 74 mark can’t be ruled out. The longer-term picture remains bullish for USDINR as long as it trades above the 200-day SMA.
On the upside, first resistance for USDINR stands at 74.700 the daily high. Next hurdle for the USDINR pair will be met at 74.848 the high from July 20. Next target to the upside will be met at the 100-day SMA at 75.212.
On the other side, the immediate support for the USDINR stands at 74.325 today’s low. Next support might provide the low from July 6 trading session at 73.851. A break below 73.851 might open the way for a move down to 73.250 the 200-day moving average.