Rangebound trading for US Dollar vs Indian Rupee as India forex reserves reach $597 billion

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US Dollar vs rupee drops 0.57% today

Highlights

The Reserve Bank of India intervened by selling large volumes of U.S. dollars through state-run banks to stabilize the rupee after record lows.
India's robust $597 billion forex reserves and a planned $5 billion USD/INR forex swap auction underpin the central bank's intervention power.
USD/INR maintains a bullish trend with strong momentum, projected to consolidate between ₹95.13 and ₹96.43 despite overbought technical signals.

Rupee pressure eases as RBI dollar sales and liquidity measures deployed

The Reserve Bank of India intervened in the currency market by selling large volumes of U.S. dollars through state-run banks to counteract the rupee's downward trajectory following all-time lows. This direct dollar supply increased immediate liquidity in the onshore market, briefly alleviating pressure on the local currency. In addition, authorities had previously announced a $5 billion USD/INR forex swap auction scheduled to inject further liquidity, while India's forex reserves remain substantial at around $597 billion, supporting the central bank’s intervention capacity. These actions were undertaken to stabilize the rupee, though price action has remained under broader selling pressure.

Upside momentum persists as overbought signals temper bullish outlook

On the technical front, USD/INR is positioned above its SMA-20 at ₹95.4141, SMA-50 at ₹94.2255, and SMA-200 at ₹91.4578. The Ichimoku Kijun level at ₹95.3057 now acts as immediate support. Momentum signals from the MACD and ADX indicate buy conditions, and RSI registers a buy at 69.6, but overbought readings on both CCI and BBP highlight the risk of short-term exhaustion. The current session’s range spans ₹95.9651 to ₹96.4573, and selling pressure has capped intraday advances amid moderate volatility.

Sideways consolidation expected as range-bound risks and momentum diverge

In the near term, USD/INR is expected to trade within the band of ₹95.13 to ₹96.43, which matches typical volatility relative to recent levels. The base scenario is for the pair to consolidate sideways in this range. A bullish outcome could see a breakout above resistance if buying momentum resumes, while a bearish move below ₹95.13 would suggest a deeper short-term correction triggered by overbought technicals.

Anton Kharitonov, expert at Traders Union, sees recent Reserve Bank of India actions providing only temporary support for the rupee. Technically, USD/INR holds above key averages and buy signals persist, but overbought readings and sustained selling pressure cap upside potential. The pair is likely to consolidate within ₹95.13 to ₹96.43 unless fresh momentum emerges. "Any further strength in USD/INR is vulnerable if short-term exhaustion triggers a break below ₹95.13."

Earlier, analysts noted that sustained policy intervention and strong technical momentum continued to underpin the USD/INR's upward trajectory, while signaling vigilance amid persistent overbought conditions. The current moderation in price action reinforces the likelihood of short-term consolidation, with traders advised to watch for renewed volatility if either the lower support or upper resistance of the projected range is breached.

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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