USD/INR pulls back from 50-day EMA with all eyes on second-tier India/US data, Fed decision

• USD/INR remains under pressure while backing down from immediate key resistance ahead of the crucial data/events.
• Indian fundamentals haven’t been positive off-late while the Fed has the ability to surprise greenback buyers.

With the US Dollar (USD) buyers marking exhaustion ahead of key events, the USD/INR pair pullback back from 50-day EMA to 68.8525 heading into the European open on Wednesday.

Not only expectations of downbeat headlines from the Shanghai and market fears ahead of the key Fed meeting but wait for second-tier data from India and the US also exert downside pressure on the quote. Among the data, India’s Federal Fiscal Deficit and Infrastructure Output for June will precede the US ADP Employment Change and Chicago Purchasing Managers’ Index for July.

While the previous deficit and infrastructure output figures from India haven’t been much impressive, 3,661.57 billion and 5.1% respectively, traders might cheer good monsoon in case the upbeat figures to drag the pair further down.

On the other hand, the US employment number can rise to 150K from 102K prior whereas manufacturing index may please greenback buyers with 50.5 mark against 49.7 earlier.

However, a major focus will be on the Federal Open Market Committee (FOMC) decision. The US central bank is expected to announce a 0.25% rate cut with likely dovish message concerning balance-sheet normalization. Though, upbeat comments from the Chairman Jerome Powell might not refrain from fuelling the USD.

Technical Analysis

Multiple supports around 68.60 and 68.40 can restrict the quote’s south-run to 68.00 round-figure while an upside break of 69.10, including 50-day exponential moving average (EMA), can trigger fresh advances to 69.40 and 70.00.