US Dollar vs Indian Rupee holds steady after Reserve Bank of India boosts NRI dollar deposits

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US Dollar vs rupee drops 0.54% today

Highlights

Indian policymakers are incentivizing non-resident US dollar deposits and increasing bond inflows to stabilize the rupee and attract foreign capital.
Renewed US dollar demand and anticipation of the upcoming Federal Reserve decision are creating sustained pressure on the rupee despite lower oil import costs.
USD/INR faces notable short- and medium-term selling pressure, with projected downside toward ₹93.78–₹94.73 and a high probability of a bearish breakout if support fails.

Policy-induced dollar inflows offset by renewed selling pressure

Indian policymakers have implemented measures to attract dollar inflows and support the rupee, increasing regulatory efforts to stabilize the currency. The Reserve Bank of India has encouraged banks to offer higher interest rates on US dollar deposits for non-resident Indians, incentivizing greater foreign currency inflows. While earlier declines in oil prices reduced import costs, renewed demand for the US dollar and investor focus on the upcoming U.S. Federal Reserve policy decision have shaped market dynamics. Foreign capital buying Indian bonds has also contributed to rupee liquidity, though price action has remained under broader selling pressure.

Mixed momentum emerges as sellers dominate intraday trading range

On the h1 timeframe, USD/INR trades below the MA-20 and MA-50, while remaining above the MA-200. The nearest notable resistance is at the Ichimoku Kijun level of ₹94.6740. The intraday downside gap is ₹0.1582, with today's low registered near ₹94.2544. Momentum signals are mixed: both MACD and ADX remain neutral, while selling pressure is present in the readings for RSI and CCI. Stoch RSI indicates oversold conditions, and BBP confirms intraday sellers remain in control despite mixed oscillator signals.

Bearish bias extends as key support looms in volatile range

In the short term, the projected trading range for USD/INR is ₹93.7831 to ₹94.7257, reflecting typical volatility given current conditions. There is a high probability of a continued decline, barring a reversal above resistance at the Kijun level. The baseline scenario expects price action to remain within this range, with a bearish extension possible if support at the range low is breached.

Viktoras Karapetjanc, analyst at Traders Union, notes that clear policy action and regulatory steps have decisively boosted non-resident Indian inflows. He sees currency support enhanced by foreign bond purchases and steady macro flows, even as dollar demand and global uncertainty keep short-term pressure elevated. Karapetjanc believes sentiment could quickly turn if resistance at ₹94.6740 is reclaimed, but current trends still favor the bears. "This is a constructive environment for long-term rupee stability, but tactical traders should respect the downside momentum until the Kijun level is taken out."

Previously it was reported that bearish momentum in USD/INR was constrained by oversold technicals, raising the prospect of a near-term rebound or consolidation. The current analysis reinforces this outlook, as mixed signals and ongoing policy support imply consolidation within the projected range, with heightened attention warranted at the ₹93.7831 support as a potential downside risk.

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.