USD/INR gathers strength, US Jobless Claims loom

• Indian Rupee loses traction on the renewed US Dollar buying.
• The markets anticipate the Reserve Bank of India (RBI) to maintain the status quo on the repo rate, leaving it unchanged at 6.5%.
• Investors await the US weekly Jobless Claims on Thursday ahead of the RBI rate decision and US Nonfarm Payrolls.

Indian Rupee (INR) continue to trade on a negative note on Thursday amid the renewed US Dollar (USD) demand. The Reserve Bank of India's (RBI) three-day monetary policy meeting began on Wednesday. RBI Governor Shaktikanta Das will announce the Monetary Policy Committee (MPC) decision on Friday.

The markets widely anticipate that RBI will maintain the interest rate unchanged at 6.50% for the fifth consecutive monetary policy meeting. The elevated inflation above the 4% target, the volatility of crude oil prices, and the concern about El Nino and agricultural output will keep the central bank on hold.

Investors will monitor the US weekly Jobless Claims, due later on Thursday. The highlight this week will be the RBI interest rate decision and the US employment data, including Nonfarm Payrolls and Unemployment Rate on Friday. The November Nonfarm Payrolls is estimated to rise by 185K, while the unemployment rate is expected to stay unchanged at 3.9%.

Daily Digest Market Movers: Indian Rupee weakens due to a slowdown in services sector growth

• India is on the path to becoming the world's third-biggest economy by 2030, according to S&P Global Ratings' latest report.
• India’s stock market value surpassed $4 trillion for the first time, fueled by moderate oil prices, resilient domestic macroeconomic data, renewed foreign inflows, and growing optimism about policy continuity in 2024 after the state assembly election results.
• S&P Global India Services PMI eased to 56.9 in November from 58.4 in October, below market consensus of 58.0.
• ADP private payrolls rose 103K in November from 106K in October, below the market estimation of 130K.
• Analysts anticipate the tightening cycle is now over and the Fed will hold interest rates until at least July, later than earlier thought, according to a Reuters poll.

Technical Analysis: Indian Rupee’s outlook remains constructive

Indian Rupee weakens on the day. The USD/INR pair remains in a familiar multi-month-old trading band of 82.80–83.40. According to the daily chart, USD/INR maintains a bullish vibe as the pair holds above the key 100-day Exponential Moving Average (EMA). The upward momentum is supported by the 14-day Relative Strength Index (RSI), which remains above the 50.0 midpoint.

The first upside barrier will emerge at the upper boundary of the trading range of 83.40. The additional upside filter to watch is the year-to-date (YTD) high of 83.47. Further north, the next hurdle is seen at a psychological round mark of 84.00.

On the downside, the strong support is envisioned at the 83.00 psychological figure. A decisive break below 83.00 will pave the way to 82.80, portraying the confluence of the lower limit of the trading range and a low of September 12. The next cushion is located at a low of August 11 at 82.60.