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  • USD/INR seesaws around 10-week high as Indian markets open on Thursday.
  • Trade/geopolitical tension question the market’s risk tone ahead of the busy calendar.
  • Indian WPI will trigger the catalyst flow that travels through Powell’s testimony and Fedspeak.

Following initial uptick to the highest since September 04, USD/INR pulls back to 72.22, during Thursday’s pre-European session, as traders await Indian WPI data for fresh impulse.

While the uncertainty surrounding the US-China trade deal was already weighing on the market sentiment, also supporting the US dollar (USD), recent political tension between the United States (US) and China concerning Vietnam adds to the market’s rush towards the greenback.

Also on the risk-negative side is the escalation of protests in Hong Kong for the fourth consecutive day. Protesters keep blocking the transportation means and injure citizens in the Asian country for multiple days in a row, which in turn pushes the government to extend the suspension of schools till this weekend.

On a bit distant note, China’s downbeat Industrial Production and Retail Sales data for October also contribute to the USD strength.

Elsewhere, the US 10-year Treasury yields take rounds to 1.9% while S&P 500 Futures and most of the Asian stocks are in the red by the press time.

Traders now look forward to India’s October month WPI Inflation, expected 0.0% versus 0.33% prior, for fresh direction. However, major market attention will be on the trade/political headlines ahead of the US Federal Reserve Chairman Jerome Powell’s second day of Testimony and comments from some other Fed speakers.

Technical Analysis

Unless breaking 72.40 on a daily closing basis, September month high near 72.65 and 73.00 are far from bull’s reach, which in turn highlights the risk of a pullback to mid-October top near 71.80.