FUNDAMENTAL
OVERVIEW
USD:
The US dollar weakened across the board on Tuesday after a couple of
headlines pointed to an imminent US-Iran deal. The weakness started when Qatari
mediators reported that the language for a possible US-Iran agreement had been
drafted.
The momentum then gathered pace when US Treasury Secretary Bessent
confirmed that an Iran deal could have come as soon as yesterday and would have
included the reopening of the Strait of Hormuz.
The US dollar losses started to get trimmed late yesterday probably because
the anticipated timeline for the deal passed without
an announcement. Nevertheless, the hopes for a deal will likely keep the
greenback on the backfoot for now unless we get another escalation.
The next major event will be the US CPI report next week. The data will be
critical for the September FOMC decision and the Jackson Hole Symposium.
A hot report will likely trigger a rally in the US dollar, with traders increasing
rate hike bets. A soft report, on the other hand, should reduce further the
risk of Fed tightening and put more pressure on the greenback
INR:
On the INR side, the
Rupee extended the gains on Tuesday after Qatari mediators and US Treasury Secretary
Bessent suggested a deal with Iran was imminent and it included the reopening
of the Strait of Hormuz.
The gains
eventually started to fade probably because the anticipated timeline for the
deal passed without an announcement. Moreover, the RBI left the repo rate
unchanged at 5.25% maintaining the neutral stance. Governor Malhotra stressed
data dependence and said that they are neither hawkish nor dovish. The lack of
hawkish guidance likely weighed further on the rupee.
In the big
picture, the Indian Rupee remains on a bearish structural trend against the US dollar,
so dip-buyers will continue to look for opportunities around strong technical
levels to keep pushing the USD/INR pair into new highs.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily
chart, we can see that USDINRbounced around the key 95.10 support zone as the buyers stepped in
with a defined risk below the support to position for a rally back into the
96.10 resistance. The sellers will need the price to break below the 95.10
support to open the door for a drop into the 94.00 handle next.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour
chart, we can see the price is breaking above the downward trendline that was
defining the bearish momentum. We can expect the buyers to increase the bullish
bets around these levels with a defined risk below the trendline to keep
targeting the 96.10 resistance. The sellers, on the other hand, will need to
wait for a break below the 95.10 support to gain conviction for a move into new
lows.
USDINR TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, we now have a minor upward trendline defining the current momentum. If
we get a pullback, the buyers will likely lean on the trendline with a defined
risk below it to keep pushing into new highs. The sellers, on the other hand,
will want to see the price breaking below the trendline and the support to pile
in for a drop into the 94.00 handle next.
UPCOMING CATALYSTS
Today, we get the latest
US Jobless Claims figures. Tomorrow, we conclude the week with the US NFP
report.
This article was written by Giuseppe Dellamotta at investinglive.com.