The USD/INR pair ended Monday’s session with around 0.1% loss near 88.00. Indian markets are closed on Tuesday due to Diwali Lakshmi Puja and Indian markets will also remain closed on Wednesday on the occasion of Balipratipada.
On Monday, USD/INR faced selling pressure while the US Dollar (USD) traded firmer as trade tensions between the United States (US) and China eased. Trade friction between the world’s two biggest powers has eased as President Donald Trump expressed confidence he will reach a deal with Beijing after meeting with Chinese leader Xi Jinping in South Korea later this month.
This week, the key trigger for the US dollar will be the delayed US Consumer Price Index (CPI) data for September, which will be published on Friday. Inflation data will significantly influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. According to the CME FedWatch tool, traders are confident that the Fed will cut interest rates at both of its remaining policy meetings this year.
Meanwhile, the outlook for the Indian rupee remains uncertain as trade tensions between India and the US are yet to be resolved. Over the weekend, US President Trump threatened to leave higher tariffs on imports from New Delhi in place unless they stop purchasing seaborne crude from Russia.
USD/INR started the week with a cautious stance and fell near 88.00. The 50-day exponential moving average (EMA) near 88.13 is acting as a major hurdle for USD/INR bulls.
The 14-day Relative Strength Index (RSI) fell near 40.00. If the RSI remains below that level, a fresh bearish momentum could emerge.
Looking below, the August 21 low at 87.07 and July 28 low at 86.55 will act as key support levels for the pair. On the positive side, 20-day EMA near 88.50 and all-time high near 89.10 will be key hurdles.
USD/INR Daily Chart
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