Indian Rupee, USD / INR, Nifty 50, RBI, US NFP, Technical Analysis – Call Points
- Native American Rupee weakens as the RBI maintains an accommodative stance despite a caring consumer price index
- The Nifty 50 won initially. However, the vote was not unanimous, bond yields rose
- USD/ INR faces the next technical test at the key point, will Nifty pay?
The Indian rupee fell in comparison US dollar after the Reserve Bank of India (RBI) left its reverse repo rate at 4.0%, as expected, in August. The central bank also voted to maintain its supportive attitude, but this was not a unanimous way against one. This could have warned investors as interest rates on Indian government bonds rose. The central bank also extended its TLTRO plan 3 months until 31 Decemberst.
Equities initially liked the result as India’s base index Nifty 50 rose after the monetary announcement. It could be for a couple of reasons. Policymakers maintained their GDP forecast for fiscal year 2022 at 9.5 percent, despite the increase in Covid cases earlier this year. Meanwhile, the central bank raised its inflation forecast in the June policy announcement from 5.1% to 5.7%.
This means that despite growing short-term price pressures, the central bank appears to be temporarily setting it aside. This is in line with most central banks around the world. Moreover, the 5.7% inflation rate is still below the central bank’s 2-6% target range. With this in mind, an urgent absence could lose policy as inflation is temporarily hot, probably in rupees initially.
The Supreme Court of India ruled in a separate market-moving event in favor of Amazon to close Future Retail Ltd. sale to Reliance Industries Ltd. Asia’s largest economies. When it crossed the wires, Nifty 50 turned lower, erasing the original benefit from the RBI interest rate decision.
Within 24 hours, the USD / INR monitors the volatility risk of US farm payroll reports. Economists have tended this overestimate the health and vitality of the economy, opening the door to disappointing data results. A significant shortfall in job growth may keep the Fed longer, but policymakers may still be vigilant if wage data remain high due to rising inflationary pressures.
RBI interest rate decision, Governor Shaktikanta Das Highlights (Via Bloomberg)
- The economy is recovering from the setback of the second wave
- Moderation oil prices can ease inflationary pressures
- Demand is improving, but conditions are weak
- Inflation risks are broadly balanced
- Markets are welcome the variable reverse repo
- The RBI ensures that government loans are properly completed
- The central bank has announced more than 100 measures since the pandemic
Indian rupee technical analysis
USD / INR faces the next major technical test after prices prolonged losses from June onwards through rising support. The couple is looking at the 74.1030 – 74.0130 turning zone, which can act as a support and send prices higher. It can focus on 23.6% Fibonacci retracement 74.3933. Otherwise, cleaning the zone may open the door to expand the top of July.
USD / INR daily schedule
Nifty 50 Technical Analysis
The Nifty 50 remains in a dominant uptrend from last year’s lowest level. Shifting the index upwards will be a growing support channel from 2020 onwards. Prices have left the Doji candlestick pattern a sign of indecision. If it appears on an upward or downward trend, it may be an early sign of a turning point. The resulting downside can open the door for retraction in the near future.
Nice daily schedule
– Written by Daniel Dubrovsky, Strategist For DailyFX.com
Use the or comments section below to contact Daniel @ddubrovskyFX Twitter