The Indian Rupee (INR) exhibited robust trading dynamics on Thursday, bolstered by a decline in the US Dollar (USD). The latest data on India’s manufacturing sector revealed encouraging signs of growth, with the HSBC Manufacturing Purchasing Managers’ Index (PMI) climbing to 59.2 in March from its previous reading of 56.9. However, the Services PMI showed a slight decrease to 60.3 from 60.6 in the previous report. Despite this mixed picture, the INR maintained its firm stance.
Moreover, comments from Federal Reserve Chair Jerome Powell, expressing a dovish outlook during the press conference, weighed on the Greenback, exerting further upward pressure on the INR. Looking ahead, market participants are closely monitoring key economic indicators, including the preliminary S&P Global PMI for March, weekly Initial Jobless Claims, and Existing Home Sales figures, scheduled for release later on Thursday.
In a related development, Krishnamurthy Venkata Subramanian, India’s executive director at the International Monetary Fund (IMF), emphasized the imperative for India to achieve sustained growth of 8% to address employment generation, poverty reduction, and inequality issues.
The Reserve Bank of India (RBI) has set a GDP growth projection of 7% for the upcoming fiscal year, citing improved household consumption and a resurgence in private investment.
During its March meeting, the Federal Reserve opted to maintain interest rates at 5.25–5.50%. Powell underscored the central bank‘s commitment to assessing inflation trends before considering any adjustments, signaling a cautious approach toward monetary policy.
Market sentiment reflects a 75% probability of a rate cut by the Fed in its June meeting, as indicated by the CME FedWatch Tool.
In terms of technical analysis, the Indian Rupee continues to trade within a defined range. The USD/INR pair encountered resistance near the upper boundary of a descending trend channel, persisting within a range of 82.60–83.15 since December 8, 2023.
Near-term projections suggest a bullish outlook for USD/INR, supported by its position above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The 14-day Relative Strength Index (RSI) indicates favorable upward momentum, positioned above the 50.0 midline.
Potential upside resistance lies at the upper boundary of the descending trend channel at 83.15. A breach above this level could prompt further bullish momentum, targeting highs of January 2 at 83.35 and the psychological level of 84.00.
Conversely, initial support is anticipated at the 83.00 mark, with downside momentum potentially extending to 82.80 and 82.60 levels. A breakthrough below the lower limit of the descending trend channel at 82.60 could signal a deeper pullback toward levels last observed on August 23 at 82.45.
