The Indian Rupee (INR) faced downward pressure on Friday, influenced by renewed demand for the US Dollar (USD). Factors such as rising oil prices and higher US Treasury bond yields contributed to the potential depreciation of the INR against the USD. However, the INR’s resilience may be supported by India’s robust economic performance and optimistic long-term outlook.
Investors are closely monitoring key economic indicators, including India’s Consumer Price Index (CPI) inflation report for March and Industrial Production for February, scheduled for release on Friday. A higher-than-expected inflation figure could bolster the INR, while the US Michigan Consumer Sentiment Index for April and speeches from Federal Reserve officials add to market sentiment.
Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister (EAC-PM), affirmed India’s positive economic growth performance and emphasized the need for sustained efforts to maintain it amid global uncertainties.
Regarding inflation, expectations point to a 4.91% increase in India’s CPI for March, remaining above the Reserve Bank of India’s (RBI) medium-term target of 4%. In contrast, recent US Producer Price Index (PPI) data slightly missed estimates, prompting speculation about the timing of interest rate adjustments by the Federal Reserve.
Technically, USD/INR maintains a bullish stance in the long term, as evidenced by its upward trajectory since breaking a descending trend channel in March. Near-term indicators, such as the 100-day Exponential Moving Average (EMA) and the 14-day Relative Strength Index (RSI), suggest further upside potential for the pair.
In terms of resistance, USD/INR faces hurdles at 83.40 and 83.70, with psychological significance at the 84.00 level. Conversely, support levels are anticipated around 83.00–83.10, with downside targets at 82.80 and 82.65.
The interplay of economic data releases and market sentiment will likely dictate the near-term direction of the USD/INR pair, with the broader economic landscape shaping its longer-term trajectory.
