2026-01-16 10:57:00
FUNDAMENTAL
OVERVIEW
USD:
The US
Dollar strengthened yesterday following strong US
Jobless Claims data. Traders responded by erasing the dovish bets seen
after the softer than expected US core inflation data. The total easing by year-end fell to 48 bps
compared to 54 bps before the release.
Fed
members continue to support the current patient and data-dependent stance, and
the improvement in jobs data is underpinning the greenback. This bullish dollar momentum will likely persist or even accelerate if the data keeps on strengthening.
INR:
The Indian Rupee remains
on a bearish structural trend against the US Dollar, and the latest technical
breakout increased the momentum as RBI’s interventions continue to fail.
The latest India’s
annual inflation rate increased to 1.33% in December compared to 0.71% in
November. This is still way below the RBI’s 4% target but closer to the bottom
of their tolerance band at 2%. Traders don’t expect the RBI to deliver another
rate cut at the upcoming meeting in February.
On the trade
front, traders are watching for potential tariff hikes on India after Trump
threatened to impose 25% tariffs on any country doing business with Iran as the
US President continues to put pressure on the regime. India has been among the
largest Iran’s trade partners in recent years, so traders are watching for the
risk of another escalation.
USDINR TECHNICAL
ANALYSIS – DAILY TIMEFRAME
USDINR – daily
On the daily
chart, we can see that USDINR finally broke above the key resistance zone
around the 90.40 level. The buyers piled in more aggressively on the breakout
targeting a rally into the upper bound of the channel around the 92.00 handle. This
remains a buy-on-dips market, so the sellers will likely need to wait for the
price to come into the upper bound of the channel or break below the bottom
trendline.
USDINR TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
USDINR – 4 hour
On the 4 hour
chart, we can see more clearly how the breakout led to a quick surge as buyers
piled in with more conviction. If we get a pullback into the resistance now
turned support, we can expect the buyers to step back in with a defined risk
below the support to keep pushing into the upper bound of the channel. The
sellers, on the other hand, will need the price to fall back below the support
to pile in for a deeper pullback into the lower bound of the channel.
USDINR TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
USDINR – 1 hour
On the 1 hour
chart, there’s not much else we can add here as the buyers will look for
dip-buying opportunities around the 90.40 support, while the sellers will
continue to wait for a break lower.
