US dollar to Indian rupee rate faces renewed foreign inflows: USD/INR slips below 200-day moving average

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US Dollar vs Rupee drops 0.55% today

Highlights

The Indian Rupee has appreciated due to lower global crude oil prices and renewed foreign fund inflows into equities.
The Reserve Bank of India used daily Variable Rate Reverse Repo auctions and forex swaps to manage excess Rupee liquidity, with recent dollar inflows increasing foreign exchange reserves.
USD/INR trades below major moving averages with oversold momentum signals, and is expected to remain between ₹93.4869 to ₹94.4265 with a high probability of further downside.

Rupee strength builds as crude declines and foreign inflows rise

Recent appreciation of the Indian Rupee has been attributed to a drop in global crude oil prices alongside renewed foreign fund inflows into the domestic market, according to FXStreet. Foreign Institutional Investors resumed purchasing Indian equities, increasing capital inflows and providing further support to the Rupee, as highlighted by Businesstoday. The Reserve Bank of India addressed excess Rupee liquidity through daily Variable Rate Reverse Repo auctions and short-term forex swap operations, while recent dollar inflows from RBI's special exchange facilities boosted India's foreign exchange reserves, as reported by Thestatesman.

Bearish momentum holds as selling exhaustion and oversold signals diverge

On the technical front, USD/INR is trading below the 20- and 50-period moving averages on the H1 timeframe, and below the 200-period average on the daily chart. The Ichimoku Kijun sits at ₹94.6051 and acts as immediate resistance. Momentum indicators present a mixed view: MACD remains on Sell, ADX is neutral, and both RSI, Stochastic RSI, and CCI are in oversold territory, which underscores short-term selling exhaustion. Negative readings from Bull/Bear Power and the Awesome Oscillator further signal prevailing bearish momentum. The divergence between weak oscillator readings and strong seller presence points to a clash between trend continuation and a possible rebound.

Downside favored as volatility caps rebound potential

In the near term, USD/INR is expected to trade within a range of ₹93.4869 to ₹94.4265 as typical volatility confines price movement. The probability favors a continued decline, while the chance of an upward move remains low. If the pair fails to break above immediate resistance at ₹94.6051, sellers could pressure prices down toward the lower end of the projected band; a sustained move above resistance would open the door for a larger rebound.

Viktoras Karapetjanc, expert at Traders Union, sees underlying macro and sentiment factors still favoring the Indian Rupee. Fresh foreign fund inflows and softer oil prices remain supportive, while RBI measures have stabilized market sentiment. He notes technicals point to an exhausted sell-off, but the downward bias persists in the short term. "If the Rupee continues to attract capital and oil remains subdued, I expect consolidation with a positive medium-term tilt for INR."

Earlier, analysts noted that persistent headwinds and technical barriers were limiting the upside for USD/INR despite supportive foreign inflows. The latest developments reinforce this cautious outlook, with a prevailing downside scenario highlighted by ongoing selling pressure and the need to monitor ₹94.6051 as a key resistance level for signs of any potential reversal.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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