USD/INR: Bears continue to guard 71.90 barrier ahead of US data

• Rupee on a four-day winning streak despite trade deal doubts.
• Lower highs on daily sticks point  to further downside.
• All eyes on trade developments and US data for fresh impetus.

The Indian rupee rebounded sharply from daily lows of 71.87 against its American counterpart in the European session, as the USD/INR cross now flirts with daily lows near 71.73 region.  

The renewed buying interest seen in the rupee can be mainly attributed to the new foreign trade policy announced by the Indian Foreign Minister Goyal, who said that the new policy will be replaced before end-March 2020.

Despite the latest bounce in the Rupee, the sentiment around the USD/INR pair remains underpinned by the safe-haven buying for the US dollar, in the wake of uncertainty over the US-China trade deal prospects and growing market nervousness.  

Also, an Indian private bank dealer said that the Indian currency remains under pressure, as “a large foreign bank’s dollar purchases led to stop-losses getting triggered in the rupee.”

“Minute buying was enough to trigger stop losses in a market where risk appetite is already weak due to trade uncertainty,” he added.

Meanwhile, the recent strength seen in oil prices could also likely remain a drag on the oil-importing currency, the Rupee. Markets now look forward to the US Manufacturing PMI and Consumer Sentiment data for fresh direction. However, the main driver will continue to remain the US-China trade-related developments.

USD/INR Levels to watch