USDINR trades 0.09% lower at 70.664 close to three week low after the correction from recent top at 71.55 reached after the RBI cut its interest rate for the Indian Rupee, by 25 bps, as widely expected by markets; that was the fifth cut so far this year in an attempt to boost the countries struggling growth.
Reserve Bank of India also reduced its growth rate projections for the year to 6.1% from 6.9%. USDINR is under selling pressure since Indian government announced a cut to corporate tax rates for domestic companies to 22%. Investors await the FOMC meeting next week with expectations pointing to a 25 basis point cut.
On the technical side, the short term momentum is neutral now as the pair trades below the 50-day moving average but above the 100 and 200-day moving averages.
On the upside, first resistance stands at 70.830 today’s high, while a break above will open the way for a move up to 71.22 the 50-day moving average, a convincing close above will attract more buyers in the market and will open the way for a move up to yearly highs at 72.428. For those looking to buy the pair, an entry point can be when the pair breaks above the 50-day moving average at 71.229.
On the downside, first support stands at 70.648 today’s low, while next barrier is at 70.330 the 100-day moving average. Traders with short positions can sit comfortably as long as the pair trades below the 71 mark.