USD INR posts gains India election results 2024

India's Rupee softens despite weaker US Dollar. Investor focus on election outcome. HSBC Services PMI and US ISM Services PMI awaited.

The upcoming release of India's HSBC Services PMI and US ISM Services PMI for May is set to impact the currency markets this week. Despite a softer US Dollar, the Indian Rupee is trading with mild losses as investors await the outcome of India's general election. A potential third consecutive win for the BJP-led government could boost investor confidence and strengthen the Indian Rupee. Additionally, factors such as risk appetite and declining crude oil prices are supporting the INR, as India is the third-largest oil consumer globally.

Looking ahead, the Reserve Bank of India's monetary policy decision and the US Nonfarm Payrolls report on Friday will be key events to watch. Stronger-than-expected US economic data may provide some support to the Greenback, potentially limiting the downside for the USD/INR pair.

Technically, the USD/INR pair is bearish on the daily timeframe, with key indicators suggesting further downside potential. The pair has crossed below the 100-day EMA and the RSI remains below the 50-midline. A potential support level lies at the 82.90-83.00 region, with a break below opening the door to lower levels at 82.78 and 82.65.

On the upside, resistance is seen near the 100-day EMA at 83.20, with a break above potentially leading to further gains towards 83.40 and 83.72. The psychological level of 84.00 could act as a significant barrier for the pair in the near term. Overall, market participants are closely monitoring economic data releases and geopolitical developments to gauge the future direction of the USD/INR pair.