USD/INR hits fresh six-day highs above 71.00 amid firmer USD, oil
- USD/INR lifted by broad USD strength and Libya woes-led oil rally.
- Dollar demand from Indian importers negates foreign inflows.
- Further upside looks likely amid holiday-thinned trading.
USD/INR extended last week’s recovery momentum into Monday, as the bulls reached a new six-day high at 71.122 before entering a phase of consolidation just ahead of the 71 level.
The stalled buying in the spot is mainly due to a doji candlestick formed on the daily chart that likely suggests buyers’ exhaustion. Further, a bullish consolidative mode seen in oil prices over the last hours seems to be capping the losses in the Indian rupee, in turn stemming the move higher.
The cross, however, remains supported by broad-based US dollar strength induced by impressive US economic data released on Friday and increased US dollar demand from the Indian importers. Moreover, importers’ demand appears to negate the substantial foreign fund inflows.
Additionally, the weakness in the Indian equities amid profit-taking also seems to be weighing on the local currency while the rally in oil prices on Libyan oilfields shutdown collaborates with the rupee downslide and keeps the pair underpinned.
Markets will keep an eye on the broader market sentiment for fresh trading impetus while holiday-thinned trading could exaggerate the dollar moves. The US markets are closed today in observance of Martin Luther King day.
USD/INR Technical levels to consider