USD/INR Price News: Indian rupee buyers attack five-week-old support line on RBI day
- USD/INR stays on the back foot near three-day low while eyeing 71.00.
- MACD flirts with the bears, US dollar’s broad weakness also favor the pair sellers.
- RBI is likely to keep the key Repo and Reverse Repo Rate unchanged at 4.00% and 3.35% respectively.
- Bears may catch breather around the monthly low before targeting the September month’s bottom.
USD/INR remains depressed around 73.14 before the Reserve Bank of India’s (RBI) monetary policy decision on early Friday. In doing so, the pair tests an ascending trend line from September 01 amid bearish MACD. Sustained trading below the two-week-old falling resistance line also favors the pair sellers.
Additionally, the RBI is expected to keep the status-quo after frequently easing their strings since off-late. In doing so, the Repo and the Reverse Repo Rate are likely to remain unchanged at 4.00% and 3.35% in that order. As a result, the Indian rupee may gain further buying pressure, which in turn adds burden onto the USD/INR pair.
Read: RBI expected to cut interest rates not before February 2021 – Barclays
On the contrary, US dollar weakness, mainly due to the hopes of a large COVID-19 stimulus from America also increases the odds of the pair’s downside.
Hence, the sellers are waiting for a clear break below the 73.10 support line to aim for the monthly low of 73.04 and the 73.00 threshold. During the pair’s further weakness past-73.00, the September month’s bottom surrounding 72.76 becomes the key.
On the contrary, the short-term resistance line around 73.55 precedes a falling trend line from June 22, at 74.04 now, to challenge the pair bulls. It should, however, be noted that the USD/INR buyers will remain cautious unless witnessing a daily break above the 200-day SMA level of 74.24.
USD/INR daily chart
Trend: Bearish