- Summary:
- The Reserve Bank of India's interventions have cushioned the rupee from 84.00, but the momentum on USDINR suggests it could get there.
USDINR rose marginally on Tuesday, with eyes trained on US Purchasing Managers Index (PMI) data. The pair was down by 0.06 percent and traded at 83.95 at the time of writing, taking another shot at the psychological round figure barrier at 84.00. However, the rupee is supported by the perception that the Reserve Bank of India (RBI) will likely intervene in the market and prevent a move to that mark.
The RBI has kept the USDINR trading within a constrained trajectory this year, seeking to ensure that the Indian economy stays on course to achieve a targeted growth rate of 7.2 percent. That said, the highlight of the week will be the US Non Farm Payrolls (NFP) data, expected on Friday, and which will have a strong bearing on the September Fed interest rate decision.
In the intervening period, traders will focus on the August S&P and PMI data, expected out on Wednesday. The HSBC India Manufacturing PMI fell below forecasts in August, coming in at 57.5 versus 57.9 percent, and that will put a lid on the rupee’s advances in the intraday session.
USDINR Prediction
The 2-hour USDINR chart favours the continuation of the upside. The price has attempted to intersect the upper Bollinger Band, which moves the next resistance near the 83.96. Also, the MACD indicator is above the signal line, adding support to the upside view.
Support and resistance levels
The buyers will likely stay in control if they keep the action above the 83.93 pivot mark. That could see the pair move up to 83.96 where it will likely encounter the first resistance. However, if they extend their control of the market, it could strengthen the upside momentum to break past the barrier and test 84.00.
Conversely, moving below 83.92 will favour the sellers to take control, and the downside will initially find support at 83.89. Extended bearishness could enable a breach below that level to test 83.86.
