USDINR was up in the Asian trading session, buoyed by ongoing trade talks between Indian and the US. The pair was at 85.45 at the time of writing, up by 0.3% on the daily chart. That said, it is still struggling for a decisive upside momentum, with the dollar still near four-month lows.
USDINR Hinged on Trade Talks and Oil Prices
The United States’ move to suspend the 27% trade tariffs against India has favoured the rupee and given it a breather as US Vice President JD Vance continues his four-day visit of India. The VP met Indian PM Narendra Modi on Monday and described trade talks between the two countries as having made “significant” progress.
US President Donald Trump has also indicated optimism that trade talks between the US and China could gain traction in the next three-to-four weeks. That has boosted investor confidence in the US dollar, and initiation of the talks could provide support for USDINR in the near-term.
On the other hand, the rupee will likely fight back as global oil prices remain suppressed amid weak demand. India’s position as the world’s third-largest importer of crude oil means that a substantial portion of its dollar reserves is spent on purchasing the commodity. Oil prices are currently down by nearly 10% year-to-date, and a continuation of the current market trend will limit USDINR upside.
USDINR Forecast
The USDINR currency pair pivots at 85.38 and action above that level favours the upside to continue. Initial resistance will likely be at 85.58. However, an extended bullish momentum will breach that barrier and could go on to test 85.80.
Conversely, breaking below 85.38 will signal the onset of downward momentum, with the first support likely to be at 85.21. Breaking below that level will invalid, and could clear the path to take the price lower to test 84.99.
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