USDINR was up on Tuesday as traders absorbed US President Donald Trump’s inauguration speech. Trump gave hints that he will waste no time in instituting tariffs against imports into the United States, but did sign any executive order to that effect. Trump signed nearly 50 executive orders, and revoked 78 issued by Joe Biden on the first day of his second term in office. However, more could be on the way as he had promised not less than 100.
Trump and Oil Prices Sway USDINR
The decision to go slow on trade-related tariffs could be interprated as Trump’s way of giving room for broader consultation. That could calm the nerves of traders in the coming days and help keep USDINR on more steady path. The currency pair traded at 86.53, an increase of 0.3% on the daily chart.
Declining crude oil prices have injected some strength into the rupee. The commodity has lost about 3.5 percent of its value in the last five days, partly as a result of the Israel-Hamas ceasefire. India is the world’s third-largest imported of crude oil, and the decline has eased its dollar demand.
That said, USDINR’s stay above 86.00 in the last six sessions has created a bullish-leaning sentiment. However, the Reserve Bank of India (RBI) is expected to intervene to reduce pressure on the rupee. The absence of high-impact data from India and the United States means that the USDINR pair will likely stay on the upward trajectory in the near term.
USDINR Forecast
USDINR pivots at 86.43 and the upside will prevail if action stays above that level. Immediate resistance is likely to be at 86.60. However, an extended upward momentum will break above that level and could test the second resistance at 86.68.
Conversely, the sellers will take control if the currency pair breaks below 86.43. That will likely see the first support come at 86.40. Meanwhile, breaking below that level will invalidate the upside narrative. Also, a stronger downward momentum could extend losses to test the second support at 86.33.
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