USD/INR holds steady amid mixed sentiment

• Indian Rupee trades flat on Monday amid the stronger US Dollar. 
• The lower bets on the Fed rate cuts and Indian foreign outflows might underpin the pair. 
• The Indian and US Consumer Price Index (CPI) for May will be due on Wednesday. 

Indian Rupee (INR) trades on a flat note on Monday despite the rebound of Greenback. The positive outlook of India's resilient economy and financial stability could provide some support to the INR. However, the robust US employment data for May pared back rate cut expectations from the Federal Open Market Committee (FOMC) might boost the US Dollar (USD) against the INR. Additionally, foreign investors have net sold Indian shares worth 422.81 billion rupees since March, contributing to the Indian Rupee's weakening. 

Investors will monitor the formation of the new government as Narendra Modi was sworn in Sunday for a third consecutive term as India’s Prime Minister. India’s Consumer Price Index (CPI) will be released on Wednesday. On the US docket, the CPI inflation report will be published on Wednesday ahead of the FOMC rate decision on Thursday.

Daily Digest Market Movers: Indian Rupee trades sideways amid mixed sentiment

• The Indian rupee is stable and inexpensive compared to its emerging market peers, making it a favorite for carry traders, said David Hauner, head of global EM fixed-income strategy at Bank of America.
• The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged at 6.5% in its June meeting. 
• The RBI revised upwards the GDP growth projection for the current fiscal year to 7.2% from 7.0% on rising private consumption and revival of demand in rural areas. 
• RBI governor Shaktikanta Das said that although India has contained inflation while keeping its economy growing, food inflation remains a concern.
• The Labor Department showed on Friday that the US economy created far more jobs than expected in May, which dampened the expectation that the US Fed will start cutting interest rates in September. 
• The US Nonfarm Payrolls (NFP) climbed 272,000 in May from a 165,000 increase (revised from 175,000) in April and came in above the forecast of 185,000, the Labor Department showed on Friday. 
• The Unemployment Rate ticked up to 4.0% in May from 3.9% in April. Meanwhile, wage inflation, as measured by the Average Hourly Earnings, rose 4.1% YoY in May from 4.0% (revised from 3.9%) in April, above the market consensus of 3.9%.
• Futures traders are now pricing in nearly 49% odds of a rate cut for the September meeting, down from 68% before the NFP data, according to the CME FedWatch tool. 

Technical analysis: USD/INR keeps the bullish picture above the 100-day EMA

The Indian Rupee trades stronger on the day. The bullish outlook of the USD/INR pair remains intact above the descending trend channel upper boundary and the key 100-day Exponential Moving Average (EMA) on the daily chart. Further consolidation mode looks favorable since the 14-day Relative Strength Index (RSI) hovers lower towards the 50-midline. 

Stronger bullish momentum past 83.55 (high of June 5) might lift the pair up to 83.72 (high of April 17) en route to the 84.00 major psychological mark

On the other hand, the resistance-turned-support level and the 100-day EMA at the 83.30–83.35 region act as an initial support level for USD/INR. Any follow-through selling might drag the pair to the 83.00 round level, followed by 82.78 (low of January 15).