- USD/INR holds ground near 82.78 after retreating from multi-month highs of 82.90.
- The Reserve Bank of India (RBI) may intervene to prevent the Rupee from falling further.
- US Initial Jobless Claims rose to 227K last week, as expected; the ISM Service PMI (Jul) fell to 52.7 from 53.9 prior.
- Investors await the US Nonfarm Payrolls due on Friday.
The USD/INR pair loses traction during the Asian session on Friday. The pair currently trades within a large consolidation phase since October 2022 and holds above 82.70. Meanwhile, The US dollar Index (DXY), a measure of the value of USD against a basket of six influential currencies, takes a breather near 102.40 after approaching the weekly high of 102.85.
Market anticipated that the Indian Rupee (INR) is likely to move in a narrow range for the next three months as the Reserve Bank of India (RBI) utilises its enormous foreign exchange reserves to keep the currency steady, according to a Reuters poll. That said, the possibility that the RBI could periodically intervene to prevent the rupee from falling further might cap the upside for the USD/INR pair.
The mixed US economic data limits the downside for the Indian Rupee. The US Department of Labor showed on Thursday that Initial Jobless Claims increased to 227,000 for the week ended July 29, matching expectations. The ISM Service PMI for July dropped to 52.7 from 53.9 prior and was worse than expected at 53. Lastly, Unit Labor Costs from Q2 came in at 1.6%, lower than the 2.6% expected.
In the absence of the economic data release from India, market players prefer to wait on the sidelines ahead of the key event on Friday. The US Nonfarm Payrolls (NFP) are due later in the American session, and the data could provide a clear direction for the pair. The US economy is expected to have created 180,000 jobs in July.
USD/INR Technical Outlook:
From the technical perspective, two converging trend lines constitute the formation of a symmetrical triangle pattern on the daily chart. The Relative Strength Index (RSI) holds above 50, and the Moving Average Convergence/Divergence (MACD) stands in bullish territory, supporting the buyers for now.
Resistance levels: 83.00, 83.20, and 83.40.
Support levels: 82.40, 82.20, and 81.90.
USD/INR daily chart
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