- The US dollar has pulled back just a bit during the trading session on Tuesday, as we continue to see the overall pullback from the attempted breakout occur in the USD/INR currency pair.
- There is a trend line underneath that a lot of people will be paying attention to, so it is worth noting that they are. \
- Furthermore, we also have the 50-Day EMA racing toward the trendline, so that offers the opportunity of taking advantage of “cheap US dollars.”
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You can also make an argument for an ascending triangle, and if we were to break above the ₹83.50 level, then we could see more momentum coming into the market. At that point, it’s likely that we would see this market and then go look into the ₹85 level given enough time. In general, I think short-term pullbacks continue to offer buying opportunities, and therefore we should continue to see plenty of interest in the greenback. That being said, Tuesday was a little bit of an anomaly in the sense that we got some rather poor US data.
Noise Ahead
The Consumer Confidence numbers came out of the United States lower than anticipated, missing by 10 points. Furthermore, the JOLTS Jobs Opening figure missed by 1 million jobs, suggesting that perhaps the Federal Reserve might be able to loosen monetary policy. I think this is a bit of a pipe dream, but that does seem to be the short-term attitude of the market. After all, if the United States goes into a recessionary environment, it’s difficult to imagine that India will do well in that world. In other words, this might end up being a nice buying opportunity, but we need to see some type of strength come back into the picture, offering a little bit of momentum to hang on to.
Keep in mind that the Non-Farm Payroll announcement comes out on Friday, and then of course will have a major influence on where we go next. With this, if the job number is hotter than anticipated, that will almost certainly send this pair much higher. That being said, the jobs number is much worse than anticipated, we could see the US dollar drop down to the ₹80 levels, which I would anticipate seeing quite a bit of noise and support at.
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