FUNDAMENTAL
OVERVIEW
USD:
The US dollar came back under pressure after some positive developments on
the US-Iran front. In fact, the US halted its
strikes after 13 days of attacks and Iran said it will maintain a ceasefire so
long as the US remains on pause.
This has led to some optimism as traders took this
latest development as an early sign of a potential de-escalation and triggered
a selloff in oil prices.
The greenback will likely remain under pressure amid
the de-escalation expectations, but traders will keep a close eye on the
headlines as things can re-escalate quickly with just a single Trump’s post.
Looking ahead, we have the FOMC rate decision on
Wednesday which is going to be one of the most important events of the week.
The Fed is expected to hold interest rates steady following the soft US
inflation data.
Fed Chair Warsh is unlikely to provide much forward
guidance, so the economic data will continue to be the deciding factor for
September and the following meetings. The potential surprises include a rate
hike, more than two dissenters voting for a hike and Warsh putting a rate hike
on the table.
INR:
On the INR side, the
Rupee rebounded following the positive developments on the US-Iran front as oil
prices dropped.
The Rupee will likely
remain supported amid the de-escalation expectations, but a re-escalation will quickly
erase the recent gains and could push it into new record lows.
In the big
picture, the Indian Rupee remains on a bearish structural trend against the US dollar,
so dip-buyers will continue to look for opportunities around strong technical
levels to keep pushing the USD/INR pair into new highs.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily
chart, we can see that USDINRdropped all the way back to the 96.00 support following some positive
developments on the US-Iran front. The buyers will likely step in around the
support with a defined risk below it to position for a rally into new record
highs. The sellers, on the other hand, will want to see the price holding the
break to keep pushing into the 94.00 handle next.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour
chart, there’s not much we can glean from this timeframe as the buyers will
continue to step in around the support, while the sellers will want the price
to stay below the support to keep targeting new lows.
USDINR TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, we have a downward trendline defining the recent bearish momentum. The
sellers will likely lean on the trendline with a defined risk above it to
position for a drop into the 94.00 handle. The buyers, on the other hand, will look
for a break higher to increase the bullish bets into new all-time highs.
UPCOMING CATALYSTS
Tomorrow, we get the US
Consumer Confidence report. On Wednesday, we have the FOMC rate decision. On
Thursday, we get the US PCE price index, the Advance Q2 GDP and the Jobless
Claims figures. On Friday, we conclude the week with the US Q2 Employment Cost
Index. The focus will continue to be on US-Iran headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.
