USD/INR Forecast
This Week

USD/INR closed the week near ₹94.95, hovering in the lower half of the recent ₹94.25–₹95.65 range as bearish momentum persists. The pair remains below both the 20-day and 50-day EMAs, with RSI(14) at 38.5 and MACD below its signal line, confirming a downward bias. Last week, the rupee found support from softer US yields and intermittent foreign portfolio inflows into Indian equities, though persistent import demand from oil marketers and defense-related purchases capped gains. The Reserve Bank of India's presence near ₹94.30–₹94.50 has been evident, with state-run banks reportedly offering dollars to prevent a sharp depreciation. Sentiment is cautious ahead of key central bank events, with traders reluctant to build aggressive positions. The overall tone remains bearish for USD/INR, but the pace of decline may slow as the market awaits fresh catalysts from the RBI MPC Minutes and the US FOMC statement.

This week, three India-specific factors will dominate. First, the RBI MPC Minutes on Monday will be scrutinized for the committee's tolerance for rupee weakness and any mention of intervention strategy; a hawkish tone could support the INR. Second, foreign institutional investor (FII) flows into Indian equities remain pivotal—any resurgence in buying could push USD/INR toward the lower end of the range. Third, import demand from oil refiners and gold traders ahead of the festive season may provide a floor near ₹94.30. Additionally, the US FOMC statement on Wednesday and US jobless claims on Thursday will influence the dollar broadly, indirectly affecting the rupee. India's current account deficit remains a structural concern, but stable oil prices and robust services exports have kept it manageable. Seasonally, June often sees remittance inflows, offering marginal support to the INR.

Immediate support lies at ₹94.31, a level that has held multiple times in recent sessions and coincides with the lower end of the weekly range estimate. A decisive break below this could open the door to ₹94.00, a psychological level where RBI intervention may intensify. On the upside, resistance is seen at ₹95.82, near the upper end of the range and the 50-day EMA. A close above this would signal a potential reversal of the bearish trend, targeting ₹96.20. For now, the pair is likely to respect these boundaries, with traders watching for any breakout cues from the upcoming events.

The bearish bias is expected to persist, with USD/INR likely to test support at ₹94.31. The RBI MPC Minutes could reinforce the central bank's discomfort with excessive rupee volatility, potentially capping upside. However, a hawkish surprise from the US FOMC or strong US data could strengthen the dollar and push the pair toward ₹95.50. Key levels to monitor are ₹94.31 on the downside and ₹95.82 on the upside. Traders should watch FII flow data and RBI intervention signals. Given the event risk, volatility may increase, so prudent risk management is advised. Overall, the path of least resistance remains lower, but the pair may consolidate within the ₹94.25–₹95.65 range before a clear direction emerges.