- USD/INR spikes above 0.70 as India announces retaliatory measures against the US tariffs.
- Will it take out 70.23 key resistance ahead of Fed decision?
The Indian Rupee opened sharply lower against its American peer on Monday, driving the USD/INR to five-week tops of 70.085.
Markets reacted negatively to the late-Friday headlines, citing that India has announced retaliatory tariffs on 28 US imports products against the US President Donald Trump’s withdrawal of the Generalized System of Preferences (GSP) program for Indian exporters.
Moreover, the Rupee remains under pressure amid widening the Indian trade deficit, in light of the recent pullback in oil prices while dark clouds persist over India’s economic growth outlook.
On the other hand, the US dollar rallied on Friday across its main peers after the retail sales report from the US beat the consensus forecasts. Upbeat consumer spending reports cooled off tensions over the US economic health and helped the greenback with a sharp rebound.
Looking ahead, the spot will look forward to further developments on the Indo-US trade dispute and the FOMC decision due later this week for fresh direction.
USD/INR Levels to watch
“During the pair’s decline past-69.64 support, comprising 50-day simple moving average (SMA), latest lows near 69.28 and six-week-old ascending trend-line at 69.14 can come back on the chart. If at all buyers successfully manage to cross 69.91/93 resistance-confluence, 70.23 and six-month-old downward sloping trend-line at 70.57 might lure them,” FXStreet’s Analyst Anil Panchal notes.