- Indian rupee completes recovery from last Friday sell-off.
- USD/INR holding under 72.80, next support at 72.55.
The USD/INR is falling on Thursday for the fourth consecutive day. It bottomed at 72.58, the lowest level in a week. As of writing, it trades at 72.72, down 0.25% for the day and far from the 74.04 peak of last Friday.
The recovery of the Indian rupee took place as emerging market currencies rose versus the US dollar even as world equity markets did not show confidence. Ongoing concerns in Wall Street, reflected mainly on the Nasdaq index on Thursday (is falling by more than 1%) could limit the rally of the Indian rupee.
Economic data from the US came slight better-than-expected with the jobless claims report. Now traders await the words of Fed’s Chair, Jerome Powell. Market participants will focus on what he says about recent developments in the bond market.
USD/INR downtrend reaffirmed but…
The bearish move that started in USD/INR back in April is still in place. The pair offered resistance at the upper limited of the bearish channel, and the price is now near the monthly lows after a sharp recovery of the Indian rupee.
The next critical level is the 72.50/55 area. A break lower would clear the way for a test of the recent low at 72.20, and below, there is not much until 72.00.
The sharp decline could suggest some consolidation ahead, probably between 72.55 and 73.50. From a wider perspective, the negative bias will persist as long as it trades under 74.00.