- USD/INR upside still intact on fundamentals, although technicals point to a downside correction.
- RBI to lower rates again to fuel economic growth, bearish daily doji forming.
USD/INR is failing in a three consecutive-day advance on the 71 handle having travelled from a low of 70.90 to a high of 71.15, capped by the confluence of the 21 and 50-day moving averages and a 38.2% Fibonacci retracement.
USD/INR has been on the bid throughout the week as there are expectations that the Indian Central Bank (RBI) will continue to cut interest rates to spur a poor economic domestic backdrop. The governor of the bank, Shaktikanta Das, recently said that the central bank is waiting for the appropriate time to introduce more easing measures.
“While taking a pause we very carefully and very definitely said there is space for further monetary policy action but the timing will have to be decided in a manner that its impact is optimum and its impact is maximized,”
RBI Governor said at the India Economic Conclave conference.
IMF is likely to significantly cut India’s growth estimates
The International Monetary Fund (IMF) will revise estimates for India’s economic growth in January, its chief economist, Gita Gopinath, said on Tuesday. “India is one of the emerging markets where growth has surprised on the downside,” she said at Times Networks’ India Economic Conclave. “If you look at recent incoming data, we will be revising the numbers and we will come up with numbers in January. It is likely to be a significant downward revision,” Gopinath said, adding that the numbers might be released around January 20. IMF currently projects India to grow at 6.1% in 2019 and 7% in 2020. Moody has already lowered its growth projection ending March 2020 to 4.9 per cent from 5.8 per cent.
USD/INR levels
A daily doji has formed on the charts which point to a downside correction. However, the shorter-term outlook is bullish: Indian Rupee Price News and Forecast: USD/INR – On a four-day winning streak amid hopes of tax relief
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