FUNDAMENTAL
OVERVIEW
USD:
The US
dollar has come under renewed pressure despite the lack of progress in the
US-Iran negotiations and the Strait of Hormuz closure. What has been weighing
on the greenback to start the week was the news saying that Iran proposed to
reopen the Strait of Hormuz if the US blockade is lifted and then hold nuclear
talks later.
This constant
push towards a diplomatic resolution instead of another full-fledged war has
been supporting the risk sentiment on expectations that a deal would be reached
eventually.
On Wednesday,
we have the FOMC policy decision and although the Fed is expected to keep
everything unchanged amid the US-Iran uncertainty, there’s a risk of a more
hawkish leaning due to resilient US data and the elevated energy prices.
A neutral
Fed shouldn’t bring much volatility, but a more hawkish one could give the US
dollar a significant boost given the recent selloff.
INR:
On the INR side, the
US-Iran stalemate led to another selloff with the Indian Rupee erasing all the
gains since the start of the month. The currency will likely remain under
pressure as long as the situation in the Strait of Hormuz remains unresolved.
In the big
picture, the Indian Rupee remains on a bearish structural trend against the US dollar,
so the dip-buyers will likely look for opportunities around strong technical
levels to keep pushing into new highs.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
USDINR – daily
On the daily
chart, we can see that USDINR rose back above the upper bound of the channel opening the door for
new highs. The buyers piled in on the break targeting a new record high, while
the sellers will now need to wait for the price to fall back below the upper bound
to regain some control and target new lows.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
USDINR – 4 hour
On the 4 hour
chart, we can see the break of the resistance around 94.00 handle that should
now act as support. If we get a pullback, we can expect the buyers to step in around
the support with a defined risk below it to keep pushing into new highs. The
sellers, on the other hand, will look for a break to pile in for a drop into
the 92.00 handle next.
USDINR TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
USDINR – 1 hour
On the 1 hour
chart, we can see the price broke above the minor counter-trendline today. More
aggressive buyers might pile in around these levels with a defined risk below
the most recent swing low to keep pushing into new highs, although the risk to
reward setup would be better around the support.
UPCOMING CATALYSTS
Tomorrow we get the US Consumer Confidence report. On Wednesday, we have the
FOMC policy decision. On Thursday, we get the US Q1 GDP, the US Employment Cost
Index and the latest US Jobless Claims figures. On Friday, we conclude the week
with the US ISM Manufacturing PMI.
