Rupee eyes 74.00 despite surging covid cases in India

  • USD/INR keeps falling for the fourth day in a row, near 74.00.
  • Surging covid cases in India, DXY’s solid comeback fails to lift the pair.
  • Weekly closing below 200-DMA calls for more pain for USD/INR.

USD/INR is extending its losing streak into the fourth straight day on Monday, little affected by the broad rebound in the US dollar and surging coronavirus cases in India.

India’s active coronavirus cases see the biggest single-day rise since April 23, rise to highest since June 20. Meanwhile, the country detects 410 fresh cases of omicron coronavirus variant, as of Monday.

Meanwhile, the US dollar is rebounding after Friday’s NFP disappointment-led sell-off vs. its major peers. The cautious market mood also underpins the dollar’s safe-haven demand, as the attention turns towards this week’s testimony by Fed Chair Jerome Powell and US inflation data.

The ongoing rally in oil prices, courtesy of the geopolitical tensions between Russia and Kazakhstan also fail to deter INR bulls, as the cross eyes more downside going forward.

At the time of writing, the spot is trading close to the daily lows of 74.15, looking to test the 74.00 round level.

The bearish outlook remains intact after the pair gave a weekly closing below the critical 200-Daily Moving Average (DMA) at 74.29 on Friday.

The immediate cap is seen at the December 31 lows of 74.10. Further south, the November 9 lows of 73.85 will be put to test.

The 14-day Relative Strength Index (RSI) is inching towards the oversold region, well below the midline, suggesting that there is more room to fall for the pair.

USD/INR: Daily chart

On the other hand, recapturing 200-DMA could trigger a fresh recovery rally towards the 100-DMA at 74.54.

Further up, the January high of 74.69 will be on buyers’ radars.

USD/INR: Additional levels


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