US Dollar vs Indian Rupee trades flat after increased foreign-currency earnings in Indian software sector

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US Dollar vs rupee gains 0.60% today

Highlights

State-backed banks have intervened to increase USD supply, aiming to slow the rupee's depreciation amid persistent volatility.
Sectors such as pharmaceuticals and software services continue to drive USD demand, benefiting from the weaker rupee despite intervention.
USD/INR maintains a strong bullish trend with high probability of upside, projected to trade between ₹95.80 and ₹97.55 over the next week.

Official dollar sales counter rupee weakness as sector demand persists

State-run banks have been intermittently selling US dollars in the foreign exchange market, directly increasing USD supply in an effort to cushion the rupee's recent weakness. This intervention helps temper the pace of rupee depreciation, but foreign-currency earnings in sectors like pharmaceuticals and software services continue to benefit from the weaker domestic currency, contributing to persistent demand for USD. Additionally, the rupee's movement remains sensitive to fluctuations in Brent crude prices, with these macro factors interplaying to support ongoing volatility in the pair.

Bullish momentum confirmed as USD/INR hovers above technical supports

On the technical front, USD/INR is trading above the SMA-20 at ₹95.57, SMA-50 at ₹94.38, and SMA-200 at ₹91.63, confirming strength across multiple timeframes. The Ichimoku Kijun level at ₹95.63 marks immediate support, while the price action remains elevated well above this level. Daily and weekly MACD and ADX indicators sustain a bullish bias, and RSI readings of 58.56 (D1) and 68.33 (W1) signal elevated momentum but stop short of overbought. The Stoch RSI on D1 is neutral, and BBP reveals an overbought intraday condition, emphasizing prevailing buyer dominance and increased volatility. The notable gap up from yesterday’s close and current proximity to the day's high point to robust upward pressure, though oscillators indicate the pair may be nearing an overheated territory.

High consolidation odds as volatility caps directional risk in near term

In the short term, USD/INR is likely to trade within a projected range of ₹95.80 to ₹97.55, reflecting a typical volatility band relative to current levels. There is a more than 80% probability of further appreciation, with downside scenarios less probable if immediate supports hold. The baseline scenario anticipates near-term consolidation between the identified support at ₹95.63 and resistance at ₹97.55, while a decisive move above resistance could accelerate gains. Conversely, a breakdown below ₹95.63 would open the path to a deeper correction.

Viktoras Karapetjanc, expert at Traders Union, sees clear bullish momentum for USD/INR supported by robust technicals and ongoing macro pressures. He believes state-run bank interventions are absorbing some volatility, but rising foreign-currency earnings and oil-driven FX demand are sustaining upward momentum. The expert notes that the pair is well anchored above key moving averages, with buyers firmly in control. Karapetjanc concludes: "Short-term volatility remains high, but with fundamentals and sentiment aligned, dips in USD/INR are likely to find buyers."

Earlier, analysts noted that USD/INR maintained a bullish outlook amid persistent rupee weakness and favorable technical momentum. With sustained buying interest now reinforced by supportive macro factors and heightened volatility, market participants should closely monitor for a potential breakout above the prevailing resistance, which could accelerate upward movement beyond recent consolidation.

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.