USD/INR trades with mild losses, eyes on US CPI data

• 
  The
  Indian
  Rupee
  edges
  higher
  in
  Thursday’s
  Asian
  session. 
• 
  The
  persistent
  Indian
  foreign
  inflows
  and
  a
  fall
  in
  crude
  oil
  prices
  support
  the
  INR. 
• 
  The
  US
  June
  Consumer
  Price
  Index
  (CPI)
  inflation
  data
  will
  be
  the
  highlight
  on
  Thursday.

The
Indian
Rupee
(INR)
strengthens
on
the
softer
US
Dollar
(USD)
on
Thursday.
Additionally,
the
sustained
inflow
of
foreign
funds
into
Indian
markets
and
the
decline
of
crude
oil
prices
all
contribute
to
the
INR’s
upside.
The
upside
of
the
pair
remains
capped
amid
the
potential
rate
cuts
by
the
US

Federal
Reserve
(Fed),
even
though
Fed
Chair
Jerome
Powell
said
the
labor
market
was
better
balanced
and
acknowledged
progress
on
cooling
inflation
without
committing
to
rate
cuts. 

Nonetheless,
the
renewed
Greenback
demand
from
importers
due
to
high
oil
price
pressures
might
undermine
the
local
currency
as
India
is
the
third
largest
consumer
of
crude
oil
in
the
world,
after
the

United
States
and
China.
Later
on
Thursday,
investors
will
closely
monitor
the
release
of
the
US
Consumer
Price
Index
(CPI)
inflation
data
for
June.
Further
progress
on
inflation
could
lead
to
key
changes
in
their
policy
statement
that
pave
the
way
for
a
September
rate
cut. 

Daily
Digest
Market
Movers:
Indian
Rupee
rebounds
amid
Indian
foreign
inflows
and
lower
crude
oil
prices

• The
  Indian
  Rupee
  is
  expected
  to
  trade
  with
  a
  slight
  bearish
  bias
  on
  weakness
  in
  the
  domestic
  market
  and
  a
  positive
  tone
  in
  the
  US
  Dollar,
  said
  Anuj
  Choudhary,
  Research
  Analyst
  at
  Sharekhan
  by
  BNP
  Paribas. 
• The
  Fed
  Chair
  Jerome
  Powell
  responded
  to
  questions
  before
  the
  House
  Financial
  Services
  Committee
  on
  Wednesday,
  saying
  that
  the
  Fed
  will
  make
  interest
  rate
  decisions
  based
  on
  the
  data,
  the
  incoming
  data,
  the
  evolving
  outlook,
  and
  the
  balance
  of
  risks,
  and
  not
  in
  consideration
  of
  political
  factors. 
• Powell
  further
  stated
  that
  it
  would
  not
  be
  appropriate
  to
  cut
  the
  policy
  rate
  until
  they
  gain
  greater
  confidence
  in
  inflation
  heading
  sustainably
  towards
  the
  Fed’s
  2%
  target. 
• Fed
  Governor
  Lisa
  Cook
  said
  on
  Thursday
  that
  US
  inflation
  should
  continue
  to
  fall
  without
  a
  significant
  further
  rise
  in
  the
  Unemployment
  Rate,
  per
  Reuters.
• The
  probability
  of
  the
  Fed
  leaving
  the
  policy
  rate
  unchanged
  in
  September
  stood
  at
  nearly
  25%
  following
  this
  event,
  according
  to
  the
  CME
  FedWatch
  Tool.
• The
  US
  CPI
  is
  projected
  to
  show
  an
  increase
  of
  3.1%
  YoY
  in
  June,
  while
  core
  inflation
  is
  projected
  to
  remain
  steady
  at
  3.4%
  YoY. 

Technical
analysis:
USD/INR
extends
consolidation
in
the
near
term

The
Indian
Rupee
trades
on
a
positive
note
on
the
day.
The

USD/INR
pair
maintains
its
uptrend
on
the
daily
chart,
with
the
pair
holding
above
the
key
100-day
Exponential
Moving
Average
(EMA). 

In
the
near
term,
further
consolidation
remains
in
play
as
the
pair
has
traded
within
a
familiar
trading
range
since
March
21.
The
neutral
momentum
is
also
supported
by
the
14-day
Relative
Strength
Index
(RSI),
which
hovers
around
the
50-midline.

Sustained
trading
above
the
upper
boundary
of
the
trading
range
at
83.65
will
pave
the
way
to
the
all-time
high
of
83.75.
Further
north,
the
next
hurdle
is
seen
at
the
84.00
psychological
barrier. 

On
the
other
hand,
a
decisive
break
below
the
100-day
EMA
at
83.36
could
draw
in
enough
bearish
demand
to
the
83.00
round
mark.
The
additional
downside
filter
to
watch
is
82.82,
a
low
of
January
12.