- USD/INR stays mildly positive after the fresh risk-on.
- The pair surged to 2019 high after Iran’s operation “Martyr Soleimani”, pulls back as the US avoids immediate reaction.
- Headlines concerning the US-Iran war will be the key while US ADP could entertain traders.
USD/INR consolidates gains to 72.00 while heading into the European open on Wednesday. The pair initially rose to a four-month high of 72.57 as Iran attacked the US airbases in Baghdad. Though, buyers booked profits as the US President said, “All is Well!”
Iran’s attack on two US military bases in Iraq triggered the market’s rush to risk-safety during the early Asian session. The Middle East nation announced it as retaliation to the US killing of Quads Force leader Qasem Soleimani.
Even so, the losses seem to have been limited, as per the US, which in turn might have pushed the US to refrain from any immediate action. Also contributing to the risk recovery could be Iran’s readiness to stop the attacks if the US doesn’t retaliate as well as requests from China to exercise such restraint.
As a result, the US 10-year treasury yields bounce off the low of 1.707% to 1.786% by the press time. The pattern could also be witnessed in Asian stocks and gold.
On the domestic front, the Indian government announced measures to simplify the taxation system while the country’s central bank, Reserve Bank of India (RBI), for the first time, plans to auction weak private sector banks. Further, ‘Bharat Bandh’ on January 08, a public retaliation to the ruling Bharatiya Janta Party's (BJP) proposal, seems to negatively affect the sentiment at home.
The US President Donald Trump is up for speaking on the matter during the day and will very much affect the market sentiment. Additionally, the US ADP Employment Change, expected 160K versus 67K prior, could also offer the pair’s moves.
Technical Analysis
A sustained break beyond the year 2019 high near 72.65 becomes necessary for the pair to aim for December 2018 top surrounding 72.82 and 73.00 round-figure. On the contrary, December 27 high around 71.55 serves as the immediate support.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds gains near 0.6250 but upside appears limited
AUD/USD remains on the front-foot near 0.6250 following the previous day's good two-way price swings amid confusion over Trump's tariff plans. The Aussie, meanwhile, remain close to over a two-year low touched last week in the wake of the RBA's dovish shift, China's economic woes and US-China trade war fears.
USD/JPY: Bulls retain control above 158.00, Japanese intervention risks loom
USD/JPY is off multi-month top but stays firm above 158.00 in the Asian session on Tuesday. Doubts over the timing when the BoJ will hike rates again and a broad-based US Dollar rebound, following Monday's Trump tariffs speculation-led sell-off, keep the pair supported ahead of US jobs data.
Gold traders appear non-committal ahead of US jobs data
Gold price is battling the short-term critical barrier at around $2,635 early Tuesday, consolidating the two-day corrective decline from three-week highs of $2,665. Gold traders refrain from placing fresh directional bets ahead of the top-tier US ISM Services PMI and JOLTS Job Openings data.
Solana Price Forecast: Open Interest reaches an all-time high of $6.48 billion
Solana price trades slightly down on Tuesday after rallying more than 12% the previous week. On-chain data hints for rallying continuation as SOL’s open interest reaches a new all-time high of $6.48 billion on Tuesday.
Five fundamentals for the week: Nonfarm Payrolls to keep traders on edge in first full week of 2025 Premium
Did the US economy enjoy a strong finish to 2024? That is the question in the first full week of trading in 2025. The all-important NFP stand out, but a look at the Federal Reserve and the Chinese economy is also of interest.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.