USD/INR consolidation remained in focus on Monday as traders looked to Indian and US inflation data due on Wednesday.
The pair held within a narrow range after the Indian Rupee lost momentum. The source article said hopes for a US-Iran deal stayed alive, although it did not arrive within the expected timeline. Meanwhile, the lack of US attacks on Iran helped keep those hopes in place.
The Reserve Bank of India left the repo rate unchanged at 5.25%. Governor Malhotra also kept a neutral tone. He said policymakers were data dependent and neither hawkish nor dovish. As a result, the lack of firmer guidance likely added pressure on the rupee.
USD/INR Consolidation Near Key Levels
On the daily chart, the pair bounced again near the 95.10 support zone. Buyers stepped in there and targeted a move back toward 96.10 resistance. However, sellers need a break below 95.10 to open the way for a drop toward 94.00.
On the four-hour chart, price action showed a consolidation band between 95.10 support and 95.60 resistance. Therefore, traders may keep playing that range until the pair breaks out on either side. On the one-hour chart, the source article said there was little to add beyond the same support and resistance levels.
US CPI Report Drives Near-Term Focus
The US dollar weakened broadly on Friday after a softer-than-expected nonfarm payrolls report. The article said payroll growth turned negative, while average hourly earnings also missed forecasts by a notable margin. That report pushed markets to reprice rate expectations.
The probability of a September rate hike fell to 38% from 54% before the release. Later, pricing normalized and the probability moved back to 48%. According to the source article, a large drop in government jobs made the report look weaker than it was, while the unemployment rate fell to 4.1%.
Next, traders will watch the US CPI report on Wednesday. The article said the data will be critical for the September FOMC decision and the Jackson Hole Symposium. It also noted that India and the United States both release CPI data on Wednesday, followed by US PPI and jobless claims on Thursday, then US retail sales and the University of Michigan consumer sentiment report on Friday.
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Source: InvestingLive
