USD/INR Forecast
This Week

USD/INR is trading at 95.55, confined to a weekly range of 94.61 to 96.49, with a neutral bias. Last week, the pair lacked clear direction as mixed global cues offset domestic factors. The RSI at 48.7 hovers near the midline, while a flat MACD and the 20-day EMA below the 50-day EMA suggest bearish momentum is waning. The rupee found mild support from stable oil prices and intermittent foreign institutional investor inflows, but import demand and a widening current account deficit kept gains in check. Sentiment remains cautious ahead of the RBI MPC minutes and the US FOMC statement. Traders are watching for any shift in the RBI's intervention stance, especially near the 94.38 support and 95.82 resistance levels, which have defined recent price action.

This week, three India-specific factors dominate. First, the RBI MPC minutes on Monday will be scrutinized for clues on the central bank's tolerance for a weaker rupee and its intervention strategy, particularly around the 94.38 support level. Second, foreign institutional investor flows remain pivotal; any resurgence in equity outflows could pressure the rupee toward 96.49, while renewed inflows might cap upside. Third, India's current account deficit, driven by persistent import demand, especially for oil, continues to weigh on the currency. Additionally, the US FOMC statement on Wednesday will influence the dollar index, indirectly affecting USD/INR. With the RBI likely defending 94.38, a break below could trigger stop-losses, but sustained intervention may limit downside. Conversely, a hawkish Fed could push the pair toward 95.82 resistance.

Immediate support is at 94.38, a level the RBI has historically defended through dollar sales. A decisive break below could open the door to 94.61, the lower end of the weekly range, and potentially trigger a sharper move toward 94.00. On the upside, resistance at 95.82 has capped gains multiple times; a close above this level would signal a bullish breakout, targeting 96.49. The 20-day EMA below the 50-day EMA reinforces bearish bias, but with RSI at 48.7, momentum is neutral. Watch for volume spikes near these levels to confirm breakouts.

The bias remains neutral, with USD/INR likely to trade between 94.38 and 95.82 this week. The RBI MPC minutes on Monday could set the tone; any hint of intervention at 94.38 may reinforce support, while a dovish Fed on Wednesday could weaken the dollar and push the pair lower. However, strong US jobless claims on Thursday or a robust PMI flash on Friday might revive dollar demand, testing 95.82. Traders should monitor FII flows and oil prices for directional cues. A break below 94.38 would be bearish, targeting 94.61, while a break above 95.82 would be bullish, aiming for 96.49. Given the neutral RSI and flat MACD, range-bound strategies may be favored until a clear catalyst emerges.