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- USD/INR bounces off intraday low, prints mild losses.
- US dollar index remains heavy near the lowest in seven weeks.
- India’s infection numbers recede for the first in a week albeit marginally.
- Risk catalysts, Indian government’s push for vaccinations will be eyed for fresh impulse.
USD/INR picks up bids to 74.77, down 0.13% intraday, amid the initial Indian trading session on Tuesday.
The US dollar weakness and the recent pullback in the nation’s covid cases seem to have favored the pair bears earlier. However, doubts over the pandemic reduction as well as greenback’s corrective pullback likely back the latest USD/INR moves.
As per the latest Bloomberg report, “New coronavirus infections dropped for the first time in a week, albeit marginally, at a time the government decided to expand the inoculation drive to everyone above the age of 18. 2.59 lakh people tested positive for the infection in the last 24 hours, according to the Health Ministry’s update at 8:00 a.m on April 20. Active cases surged past 20 lakh for the first time.”
The Indian government announced the extension of its vaccination plan to over 18 years of age the previous day amid criticism of the ruling party’s governance during the pandemic.
On the other hand, the US dollar index (DXY) drops to the lowest since early March as markets cheer hopes of further stimulus from America and faster vaccinations driving sooner economic recoveries.
Against this backdrop, stocks in India remains mildly bid while following the S&P 500 Futures whereas the US 10-year Treasury yields also stay firmer above 1.61% by the press time.
Given the lack of major data/events up for publishing, risk catalysts remain the key to watch for fresh direction.
Technical analysis
A clear break above 74.95 will confirm a bullish flag on the four-hour chart, which in turn should direct USD/INR prices towards the monthly top of 75.49. Meanwhile, the support line of the stated flag near 74.07 can precede the 74.00 threshold to test the sellers.