Rupee justifies upbeat India corporate earnings, pre-NFP consolidation near 82.20

• USD/INR extends Friday’s pullback from two-week high, pressured near intraday low of late.
• An aggregate 32% rise in net profit of 456 Indian companies underpins optimism about Rupee.
• US Dollar’s positioning for NFP, month-end consolidation and mixed sentiment in Asia allow sellers to remain hopeful.
• US ISM PMI, risk catalyst can entertain traders ahead of monthly employment data for July.

USD/INR stays on the back foot around 82.20 as it prods short-term key support confluence amid early Monday in Asia. In doing so, the Indian Rupee (INR) pair drops for the second consecutive day amid mixed sentiment in the market ahead of the all-important US Nonfarm Payrolls (NFP), up for publishing on Friday.

That said, downbeat prints of the US inflation clues and the recently softer comments from the Fed officials weigh on the USD/INR prices amid cautious optimism in the Asia-Pacific zone.

Recently, China’s State Council announced multiple measures to conserve and boost consumer demand and favored the risk-on mood in Asia. Additionally, weekend comments from European Central Bank (ECB) and the Federal Reserve (Fed) officials suggest nearness to the policy pivot and offered reason to better prepare the US Dollar for this week’s employment report for July.

At home, Reuters shared a report from Geojit Financial Services mentioning that the aggregate net profit and revenue of these companies grew 32% and 7.88% from a year earlier, with profit growing at the fastest pace in eight quarters.

Further, the recent retreat of the WTI crude oil from a 14-week high, down 0.50% intraday near $80.10 by the press time, also allows the Indian Rupee (INR) to remain firmer due to the nation’s heavy reliance on the Oil imports.

It’s worth noting that the MSCI’s index of Asia-Pacific shares outside Japan remains firmer at the latest highest levels since early February whereas S&P500 Futures seesaw past 4,600, close the yearly top. Further, the US Dollar Index (DXY) struggles for clear directions around 101.70 after retreating from a three-week high the previous day, due to the softer prints of the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index for June.

Moving on, risk catalysts and a few more activity data from China may entertain USD/INR traders ahead of US ISM PMI and Nonfarm Payrolls (NFP) for July.

Technical analysis

A convergence of the 100 and 21 DMA restricts the immediate downside of the USD/INR pair around 82.20 even if the recovery remains elusive below a three-week-old resistance line, close to 82.40 at the latest.