- The Indian Rupee is trading steadily during Monday's early European session.
- While lower crude oil prices provide support for the INR, ongoing foreign outflows from India may limit its potential gains.
- Investors are closely monitoring the upcoming advanced US GDP growth figures for the third quarter, scheduled for release on Wednesday, in anticipation of the Non-Farm Payroll (NFP) data.
The Indian Rupee (INR) is trading flat on Monday, despite the stronger US Dollar (USD). The decline in crude oil prices could offer some support to the INR, given that India is the world’s third-largest oil consumer. However, the currency's upside potential may be constrained by ongoing foreign outflows from domestic stocks and expectations of a slower pace of rate cuts by the US Federal Reserve (Fed).
Investors are closely monitoring the upcoming advanced US Gross Domestic Product (GDP) Annualized figures for the third quarter (Q3), scheduled for release on Wednesday. Additionally, the Core Personal Consumption Expenditures (PCE) Price Index for September will be published on Thursday, followed by the highly anticipated US Nonfarm Payrolls (NFP) report on Friday.
Daily Digest Market Movers: INR Flat, Limited Upside Potential
- India’s economic growth is projected to range between 7.0% and 7.2% for the fiscal year 2024-25, according to Deloitte India’s latest Economic Outlook.
- Preliminary estimates indicate that India’s HSBC Manufacturing Purchasing Managers Index (PMI) rose to 57.4 in October, up from 56.5 in the previous month. Meanwhile, the Services PMI increased to 57.9 in October, recovering from a one-year low of 57.7 in September.
- In the US, the Michigan Consumer Sentiment Index improved to 70.5 in October, up from 68.9 in the previous reading and surpassing expectations.
- Durable Goods Orders decreased by 0.8% month-over-month in September, which was better than the market consensus of a 1% decline. Excluding transportation, Durable Goods Orders increased by 0.4% in September. According to the CME FedWatch tool, US rate futures are pricing in a 97.7% probability that the Fed will implement a 25 basis point (bps) rate cut in November.
Technical Analysis: Constructive Outlook for USD/INR Remains Intact
The Indian Rupee continues to trade sideways today. According to the daily chart, the bullish outlook for the USD/INR pair remains solid, with prices holding above the key 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is situated above the midline at around 60.00, indicating favorable conditions for further upside movement.
Sustained trading above the upper boundary of the ascending trend channel at 84.20 could open the path toward 84.50, leading to the psychological level of 85.00.
Conversely, the initial support level is positioned at the lower limit of the trend channel near 84.05, with the next key support at 83.75, which corresponds to the 100-day EMA.
