USD/INR forecast: signal as an ascending triangle forms

October 12, 2023 11:40 PM AEDT | By Invezz

USD/INR forecast: signal as an ascending triangle forms — Image source: Invezz

US and India inflation data

The USD/INR pair was in the spotlight after the latest US and India CPI data. Numbers by the Bureau of Labor Statistics (BLS) showed that America’s inflation slipped from 0.6% in August to 0.4% in September even as the price of gas jumped sharply during the month.

US inflation rose by 3.7% on a YoY basis, higher than the median estimate of 3.6%. Core inflation, on the other hand, remained unchanged at 0.3% MoM and dropped to 4.1% on a YoY basis. The latter is an important number since it strips the most volatile products in the economy.

These numbers came a few hours after the Federal Reserve published minutes of the last meeting. The minutes showed that most officials supported pausing rate hikes and maintaining them at an elevated level for a while. Analysts expect the Fed will deliver another rate hike either in November or December.

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The USD/INR pair also consolidated after the encouraging Indian inflation data. According to the country’s statistics agency, the headline inflation dropped from 6.83% in August to 5.02% in September. This decline was better than the median estimate of 5.50%.

Another report revealed that India’s industrial production rose by 10.3% in August. This was a bigger increase than the expected 9.0%. Manufacturing output also rose from 5.0% in July to 9.3% in August.

These numbers mean that the Reserve Bank of India (RBI) is balancing the country’s recovery with lowering inflation.

USD/INR technical analysis

The 4H chart shows that the USD to INR exchange rate has been in a narrow range in the past few weeks. It has found a strong resistance at 83.305, the highest point since September 15th. The pair has risen above the 50-period moving average.

It has also formed an ascending triangle pattern, which is usually a bullish sign. Therefore, the outlook for the pair is bullish. This view will be confirmed if the price moves above the resistance at 83.30. A move above this price will see it rise to an all-time high at 83.41.

The post USD/INR forecast: signal as an ascending triangle forms appeared first on Invezz.

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