Usdinr Turns Negative As Us Pmi Looms

 Usdinr Turns Negative As Us Pmi Looms

USD/INR Turns Negative As US PMI Looms

In a strange turn of events, the Indian Rupee (INR) is showing strength against the US Dollar (USD). This comes at a time when the US bond yields are on the decline along with the oil prices.

In addition, the ruling party of India has also won recent state elections, which is also working in favor of the Indian Rupee (INR). According to experts, the election results will lead to inflows of equities in the US economy. So, that's another factor that is preventing the devaluation of INR in the short term.

India's Interest Rate Expected To Stay Unchanged

The RBI (Reserve Bank of India) is also expected not to change the interest rate at the next meeting. This means the interest rate in India will remain steady at near 6.50%, with a chance of more hikes at the next meetings.

According to the forecasts, the MPC will go with its decision to pause the rate hikes as the authorities are concerned about the inflation situation in the country.

Another important release before the interest rate decision from the RBI is the US ISM PMI (Services). The forecast suggests that the US Services PMI will jump to 52.0 from an earlier reading of 51.8.

The bottom line is that the INR is moving higher against the technical and economic backdrop. Since September 2023, the USD/INR trading range has been between 82.80 to 83.40. Many experts believe that the USD/INR will maintain a bullish tone as long as it floats above the 100 EMA.

The RSI indicator also supports bullish momentum in the USD/INR as it is already above the 50 level, which means more upside is ahead.

If the USD/INR manages to cross the 83.40 resistance level, it will then move toward the 84.00 level. On the contrary, the 83.00 support will be closely watched by the USD/INR bears, followed by the 82.80 & 82.50 levels.

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