USD/INR Price News: Indian rupee retreats towards 79.50 key level ahead of Fed Minutes

• USD/INR bounces off weekly low but stays below support-turned-resistance.
• Softer oil prices, hopes of easing inflation in India favor pair sellers.
• Recession concerns, anxiety ahead of the FOMC Minutes add strength to the bullish bias.

USD/INR bounces off the weekly low to approach the previous support during early Wednesday, at 79.30 by the press time. In doing so, the Indian rupee (INR) pair consolidates the recent losses as the US dollar regains acceptance ahead of the Federal Open Market Committee (FOMC) meeting minutes.

In addition to the US dollar’s corrective pullback and the pre-event anxiety, risk-negative headlines surrounding China and the recent improvement in oil prices also seems to have triggered the USD/INR rebound.

WTI crude oil licks its wounds around the lowest levels since late January as it picks up bids to $86.70 by the press time. India’s reliance on energy imports and a record high trade deficit keeps the INR vulnerable to oil price moves.

China’s Premier Li Keqiang recently crossed wires, via the Communist Party’s flagship newspaper People’s Daily, while urging local officials from six key provinces that account for about 40% of the country’s economy to bolster pro-growth measures. On Wednesday, President Xi Jinping and state planner National Development and Reform Commission (NDRC) showed readiness for more measures to combat the recession fears.

It’s worth noting that the recently easing inflation numbers from India and the WTI crude oil’s three-day downtrend to refresh the multi-month low seemed to have favored the USD/INR bears earlier.

That said, US 10-year Treasury yields fade the previous day’s rebound while S&P 500 Futures retreat from a four-month high.

Looking forward, the US Retail Sales for July, expected 0.1% versus 1.0% prior, as well as the FOMC meeting minutes, for clear directions. Also important will be the headlines concerning China and the recession.

Technical analysis

A convergence of the 21-DMA and a two-week-old ascending trend line, around 79.45, appears strong intraday hurdle for the USD/INR buyers to cross to retake control.

On the contrary, a horizontal area comprising multiple levels marked since late June, around 79.10, restricts the pair’s immediate downside ahead of directing the bears towards the monthly low near 78.40.

USD/INR: Daily chart

Trend: Pulback expected