US President Biden has welcomed the overnight passage of a $1.9 trillion coronavirus relief package, by the US House of Representatives, saying it moves the country closer to full Covid-19 vaccination and economic recovery. The package passed the House, in a 219 to 212 vote, with not one Republican vote, and this week it will move to the Senate.
Ahead of this enormous package, the volatility in the market will continue because a spike in US bond yields is likely to trigger a flight to the safety of the US dollar among investors. The 1-month ATM Volatility has surged to 7% compared to 4.17% observed in the first week of February. Also, this week, offers a robust economic calendar, with a global focus on manufacturing and services PMI data.
The USDINR Spot opened the week at 73.77 compared to the previous close of 73.46, however, today we saw a massive selling by exporters. The crucial support is located at 73.20-73.0 and consistent trading below 73.0 only we can see a dip towards 72.85-72.70-72.50. On the upside, 73.60/73.70 is strong resistance above which next resistance is at 74.20. Once it breaches and sustains above 74.20 then the next level is seen at 74.50-74.75 for the medium term. Only a break of 72.70 will push prices lower, however, until then we can expect a sideways move in between 72.70-73.75.