The Indian Rupee (INR) opens lower against the US Dollar (USD) on Wednesday. The USD/INR pair rises to near 94.72 as stronger United States (US) Treasury Yields and higher US Dollar have diminished the appeal of risk-sensitive currencies. However, the downside in the Indian currency is expected to remain limited as oil prices remain lower.
During press time, 10-year US Treasury Yields trade 0.18% higher to near 4.47%. On Tuesday, US bond yields surged a little over 2%, following strong US JOLTS Job Openings data for May. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is up 0.16% to near 101.33.
On Tuesday, the US Bureau of Labor Statistics reported that employers posted 7.594 million fresh jobs, higher than the estimated 7.3 million and the previous reading of 7.585 million.
Meanwhile, the Indian central bank likely intervened in the foreign exchange market to support the rupee on Wednesday, according to Reuters.
Investors keenly await US NFP data
This week, the major trigger for USD/INR will be the US Nonfarm Payrolls (NFP) data for June, which will be released on Thursday. The significance of the US official employment data over the Federal Reserve’s (Fed) interest rate expectations is expected to be high, as the latest remarks from Fed Chair Kevin Warsh showed that he would refrain from delivering forward-looking guidance in the current policy conjuncture.
Currently, the CME FedWatch tool shows an over 82% chance that the Fed will deliver at least one interest rate hike this year.
The US NFP report is expected to show that the economy created 110K fresh jobs, lower than 172K in May. The Unemployment Rate is seen remaining steady at 4.3%.
In Wednesday’s session, investors will focus on the US ADP Employment Change and the ISM Manufacturing PMI data for June, which will be released during the North American session.
According to estimates, the US private sector created 113K fresh jobs, slightly lower than 122K in May. The ISM Manufacturing PMI is expected to remain steady at 54.0.
Investors await fresh cues regarding Hormuz future
The MCX Crude Oil contract expiring on July 20 remains close to its lowest level in months at around 6,500, as energy flows through the Strait of Hormuz, a critical chokepoint to almost one-fifth of global energy supply, have increased. However, Iran’s multiple attempts for global recognition of its authority near the chokepoint have renewed concerns over energy supply disruption.
On Tuesday, negotiation teams from the US and Iran were scheduled to meet in Oman to discuss the Hormuz situation. However, the meeting didn’t take place as Washington refused to have direct talks with Iran, citing that it would only meet through mediators despite landing in Oman.
Technical Analysis: USD/INR continues to face pressure near 20-day EMA
USD/INR trades higher at around 94.67, while keeping a mildly bearish near-term tone as it holds below the 20-period Exponential Moving Average (EMA) at 94.7753 and under the downward-sloping border of the descending triangle pattern plotted from 97.02. The pair still leans on the horizontal support of the above-mentioned chart pattern drawn from near 94.03, suggesting ongoing but fragile demand, while the Relative Strength Index (RSI) around 47 hints at consolidative downside pressure rather than a decisive trend.
On the topside, initial resistance is seen at the 20-period EMA clustered near 94.78, with the former trendline break region around 95.03 acting as the next barrier, ahead of the broader descending trend cap nearer 97.02. On the downside, immediate support is defined by the trendline break zone at approximately 94.12 and then closer to the structural origin of the uptrend around 94.03, where a break would reinforce a fresh leg of downside.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
JOLTS Job Openings
JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.
