USD/INR holds steady as traders await Indian Services PMI release

• The Indian Rupee steadies in Wednesday’s Asian session.
• India's disappointing GDP data, foreign fund outflows and strengthening of the USD weigh on the INR. 
• The HSBC India Services PMI is due later on Wednesday, ahead of Fed Chair Powell’s speech. 

The Indian Rupee (INR) trades on a flat note on Wednesday after reaching its all-time low in the previous session. The weakness in the local currency is expected to persist due to India's sluggish Gross Domestic Product (GDP) growth, persistent outflows in Indian markets, and significant US Dollar (USD) demand. Nonetheless, the downside for the INR might be limited amid the foreign exchange intervention by the Reserve Bank of India (RBI) via USD sales. 

Investors await the release of the HSBC India Services Purchasing Managers Index (PMI) for fresh impetus, which is estimated to improve to 59.2 in November from 58.5 in October. If the reading shows a stronger-than-expected outcome, this could provide some support to the Indian Rupee. On the US docket, the ADP Employment Change report, final S&P Global Services PMI, ISM Services PMI and the Fed’s Beige Book will be published. Additionally, the Federal Reserve’s (Fed) Chair Jerome Powell speech will be closely watched later in the day. 

Indian Rupee remains vulnerable amid geopolitical uncertainties

• “The RBI may also intervene in the dollar market to provide the rupee with some temporary strength, although broader economic factors will likely keep the rupee under pressure,” said Vishnu Kant Upadhyay, AVP - Research and Advisory at Master Capital Services Ltd. 
• The US JOLTs Job Openings increased from 7.372 million in October to 7.744 million openings in November, the US Bureau of Labor Statistics (BLS) reported on Tuesday. This reading was above the market consensus of 7.48 million.
• San Francisco Fed President Mary Daly said on Tuesday that she sees inflation progress and a solid job market, adding that the central bank has to continue to recalibrate policy. 
• Chicago Fed President Austan Goolsbee noted, "Over the next year it feels to me like rates come down a fair amount from where they are now, but we meet every six weeks because the conditions change.”
• Fed Governor Adriana Kugler stated that the US economy is in a good position after making significant progress in recent years toward our dual-mandate goals of maximum employment and stable prices.  

USD/INR’s uptrend prevails in the longer term

The Indian Rupee trades flat on the day. The constructive outlook of the USD/INR pair remains unchanged as the pair is well supported above the key 100-day Exponential Moving Average (EMA). The path of least resistance level is to the upside as the 14-day Relative Strength Index (RSI) stands above the midline near 67.00, supporting the buyers in the near term. 

The all-time high of 84.77 acts as the first upside barrier for USD/INR. A decisive break above the mentioned level could pave the way to the 85.00 psychological mark, en route to 85.50.

On the downside, a breach of the resistance-turned-support at 84.55 could drag the pair lower to 84.22, the low of November 25. The key contention level is located at 84.00, the 100-day EMA and round figure.