USD/INR extends previous losses amid broad USD weakness

• USD/INR steps back from 50/100-DMA.
• The USD registers broad declines after the US House of Representatives voted to impeach President Trump.
• Second-tier data from India, the US will offer intermediate moves while major direction can be gained through trade/political headlines.

USD/INR has to bear the burden of broad US Dollar (USD) weakness as it declines to 70.97 while heading into the European session on Thursday.

The quote previously benefited from the record surge in the Indian equity markets, backed by expectations of further government measures, coupled with the positive headlines concerning the US-China trade relations.

Early in the Asian session, the US President Donald Trump reiterated his favorite lines of having “a great deal with China” while the White House Adviser Larry Kudlow conveyed skepticism over the phase-one. Following that, the US House of Representatives voted to impeach President Donald Trump on grounds of misusing his powers and obstructing Congress. However, the Senate is less likely to approve the same, during early January, as the ruling Republicans have the majority in there.

Even so, the USD declined across the board after the decision, which in turn weighed on the market’s risk tone and dragged the US 10-year treasury yields near to 1.90%.

Markets in India are trading in mild losses as the government failed to deliver good news from the Goods and Services Tax (GST) committee meeting. Also, looming risks of a growth outlook downgrade by the International Monetary Fund (IMF), coupled with the Moody’s fresh Gross Domestic Product (GDP) cut, added worries for the Asian traders.

Traders will now look forward to India’s Trade Deficit, Balance of Payments and Current Account figures while the US Philadelphia Fed Manufacturing Survey, weekly jobless claims and Existing Home Sales can also entertain momentum traders.

Technical Analysis

A sustained break of 71.24/27 area including 50 and 100-Day Simple Moving Average (DMA) becomes necessary for the pair to aim for 71.50 and the monthly top surrounding 72.00. On the downside, the 200-DMA level of 70.28 acts as the key support.