USD/INR may fall within upward channel to 62.15 before pushing back up to new highs near 63.0 IBTimes UK/FXStreet

The Indian rupee continued to slide and fell to a one-month low against the dollar as increasing chances of a US rate cut continued to dampen demand for Indian assets.

USD/INR rose to 62.56, its highest since 9 January, and up from the previous close of 62.39. The pair has been on an upward trend since 28 January when it hit a three-month low of 62.26.

Data from Securities Exchange Board of India showed that foreign investors sold $41mn more rupee-denominated debt than they bought this week through Tuesday.

Traders said the rupee was under selling pressure also taking cues from its regional peers.

The Malaysian ringgit has fallen near a 6-year low and Thai baht fell to a 9-day low of 32.68 while the Indonesian rupiah plunged to a near 2-month low of 12,869, very close to the multi-year low of 13,000 hit on 15 December.

The US dollar index has been inching higher since the 6 February jobs data that showed non-farm payroll addition in the US was more than expected in January.

The USD index is trading near 95.0, up 1.6% from the near two-week low of 93.5 where it has been before the jobs data last Friday and the 12-year high of 95.47 hit last month is now only a tad away.

Technical analysis shows that USD/INR is testing channel resistance inside the uptrend since 28 January. In case a failure, the pair will fall back to 62.15 a break of which can open doors to 62.00 and in case of a closing break of that, the next level to watch out for will be 61.26, the January three-moth low.

However, MACD and moving averages indicate upside momentum, with which the pair could next aim 62.70. A decisive break of that can take the pair to 63.000 ahead of 63.300. The next higher level will be 62.6300 before a retest of the December record of 64.09.