Foreign investment boost and RBI dollar sales: Can USD/INR recover from recent selling pressure?

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US Dollar vs Indian Rupee drops 0.51%

Highlights

Foreign investors added over $4 billion to Indian equities in November, increasing rupee demand.
A sharp decline in crude oil prices and recent RBI dollar sales contributed to rupee appreciation.
USD/INR trades below major moving averages with strong seller pressure, forecasting a 92.8657 to 93.7991 range and a high probability of further decline.

Rupee appreciates on foreign inflows and RBI intervention

Foreign investors moved over $4 billion into Indian equities during November, increasing demand for the rupee as highlighted by Tradingpedia. This capital inflow has been accompanied by a sharp drop in crude oil prices, which lowers India's USD outflows for energy imports and indirectly strengthens the rupee, according to FXStreet. Separately, the Reserve Bank of India's recent dollar sales and associated foreign exchange reserve drawdown of $2.69 billion further contributed to the rupee's appreciation, as reported by Livemint, though price action has remained under broader selling pressure.

Bearish momentum persists amid oversold signals and resistance cap

USD/INR is positioned below its MA-20 and MA-50 on the hourly chart, and also beneath the MA-200 on the daily timeframe. Immediate resistance is seen at the Ichimoku Kijun level of ₹93.844. Momentum indicators remain negative, with both MACD and ADX showing sell conditions, while Bull/Bear Power at -0.0091 indicates sellers dominate intraday trades. Stoch RSI and RSI are neutral at this stage, and CCI signals an oversold condition, suggesting possible seller exhaustion. The Awesome Oscillator continues to support overall short-term bearishness, with mixed readings from the oscillators indicating that momentum exhaustion is not yet confirmed.

Downside risk prevails as breakout requires overcoming resistance

Over the next 2–3 sessions, USD/INR is likely to remain confined within the trading corridor of ₹92.8657–₹93.7991, reflecting typical volatility for this pair. The probability of an upward move is currently very low, while the risk of a continued decline remains elevated. A bullish scenario would require a breakout above resistance, but sustained weakness is expected unless support is breached.

Viktoras Karapetjanc, expert at Traders Union, sees robust foreign investment inflows and lower crude prices supporting the rupee. He believes recent Reserve Bank of India interventions add further downside risk for USD/INR, despite ongoing volatility. Technicals remain negative, with no signs of a reversal yet. Momentum may shift if resistance at ₹93.844 is broken, but the short-term outlook is still bearish. "Current macro and sentiment drivers keep my outlook positive for the rupee — I favor further downside for USD/INR as long as flows hold up and support remains intact."

Earlier, analysts noted that persistent foreign inflows and falling global oil prices had placed sustained downside pressure on the USD/INR pair. The latest developments reinforce this bearish outlook, with traders advised to monitor the lower boundary of the ₹92.8657–₹93.7991 range for signs of further decline or potential stabilization in the coming sessions.

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.