The Indian Rupee-USD/INR, Nifty 50, the US Dollar, and India, corona virus – the Points of discussion
- The Indian Rupee, Nifty 50 gain, with a broad, optimistic market tone
- The risks brewing in the background: the GDP of India and the credit rating
- USD/INR remains in a consolidation, an Owl of the pressures and the resistance
The Indian Rupee has benefited from the decline against the US Dollar, but not quite to the same extent by the neighbor The ASEAN-oriented currencies such as SGD, IDR, MYR and PHP. These are often sensitive to changes in the the large global market sentimentthat has been recovering since the end of January. India’s benchmark stock index, the Nifty 50, has participated in this recovery, as the Rupee gained.
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Last week, my Wall Street, the index to avoid a technical glitch in small groups, setting the stage for the rally in stocks Monday as expected. Investors are emerging to overcome the local and external turmoil for the time being, looking forward the economic recovery, an easing program in the social-distancing measures. In India, it also appears at the head in the same direction, with the prohibitions, is preparing to be eased in phases from next week.
Still, Moody’s recently cut India’s sovereign credit rating to “Baa3” to “Baa2” with a negative outlook. That is, the least investment quality of the assessment of the credit rating agency. That may have helped to explain why the Dollar is doing slightly better against INR than some of its counterparts in ASEAN. It can also compromise last week to beat, and in the local, first-quarter GDP data.
Indian growth slowed to 3.1% y/y from a revised-lower-to 4.1% in Q4. Granted, this is widely beat economists ‘ more pessimistic 1.6% estimate. Keep in mind that the nation went into lockdown, towards the end of the Q1. Economists surveyed by Bloomberg projected year 2021, real GDP is to shrink -1.9% y/y. This would be the sharpest fall in 40 years, and could, in the long term, to compare relative to the Indian Rupee.
The Indian Rupee Technical Analysis
From a technical point of view, the pair USD/INR remains fairly narrow, the failure of the range since mid-April. The prices were also between the outside the resistance (76.24) and the outside support (74.96). An upward trend line from April, the red line appears to guide the pair to be slightly higher.
Still, the closure of under it, is not necessarily open the way to a break to the downside until prices fall through 74.96 with a confirmation. The latter exposes the former high-ranking from the end of 2018. Otherwise, for those who are expert can pave the way for a new test of the April peak at 77.
USD/INR Daily Chart
Nifty 50: Technical Analysis
The recent progress in the Nifty 50 have left India’s benchmark stock index is the pressure on the critical resistance that is within a range between 9896 – 10012. This area is composed of lows from April and October, or at the end of 2018. This range has been approved at the end of April, while prices have fallen, and has established an upward trend line from March is the red line.
If the resistance holds here, the Owl could turn lower to retest without batting an eyelid, support. The Close below the line would then expose the September low at 8806. Otherwise, for those who are expert can open the door to a new review of lows from the second half of 2019.
Nifty 50 Daily Chart
— Written by Daniel Dubrovsky, a Currency Analyst to DailyFX.com
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