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  • USD/INR bounces off two-week low to refresh intraday high.
  • Trading sentiment sours amid virus woes, Aussie-China trade tussle.
  • US election results, vaccine hopes and expectations of stimulus battle bears.
  • Indian Trade Deficit, Balance of Payment details will be eyed for fresh impulse.

USD/INR refreshes intraday high to 73.65, up 0.02% on a day, while bouncing off the lowest since November 02 during early Tuesday. The quote recently recovered as the US dollar pulled back from the April 2018 low, flashed the previous day, amid a mild risk-off mood in Asia.

Joe Biden’s victory in Electoral College and upbeat comments from the American Congress, relating to the coronavirus (COVID-19) stimulus, join the vaccine-related welcome news to keep the markets hopeful. However, worsening virus conditions in Tokyo, the UK, Europe and the US weigh the mood.

Also challenging the sentiment could be mixed figures of Industrial Production and Retail Sales data, for November, from China, as well as Canberra-Beijing tussle. Although Chinese Industrial Production rose for the eighth month, also matched the forecast of 7.0%, the Retail Sales eased from the market consensus of 5.2% to 5.0% YoY during November. Further, tensions between Australia and China are getting fierce as the former is signaling to approach the World Trade Organization (WTO) for the dragon nation’s alleged trade-punitive measures over the Aussie Barley and coal.

Read: Asian stocks retreat as virus woes, Aussie-China tension battle covid vaccine hopes

At home, India’s WPI Inflation eases below 1.62% to 1.55% in October while the Consumer Price Index (CPI), also known as the retail inflation data, eased from 7.61% in October to 6.93% YoY in November, as per the figures from the Ministry of Statistics and Programme Implementation, India.

Looking forward, the quote is likely to fade the upside momentum if the Trade Deficit matches the $9.96B forecast while Balance of Payment crosses $19.8B prior during the second quarter (Q2). Also expected to challenge the pair bulls can be the US dollar weakness. Though, broad risk-off in Asia may tame restrict USD/INR downside.

Technical analysis

Unless breaking an area including 21-day SMA and a falling trend line from November 13, around 73.85/90, USD/INR bulls are less likely to return.