The Indian Rupee (INR) has fallen to new record lows against the US Dollar (USD), continuing a bullish trend driven by structural headwinds. This decline persists despite a general weakening of the USD across major currencies following the Federal Reserve’s recent announcement. The Fed indicated a higher threshold for further rate cuts, yet Fed Chair Jerome Powell delivered a dovish tone by downplaying inflation risks and emphasising the labour market’s importance.
Currently, US-India trade talks are taking place in New Delhi. Although a comprehensive trade deal appears some way off, India aims to secure at least a basic framework by the end of the year. Such progress could provide some relief for the Rupee, but it is unlikely to reverse the overall downward trend. Conversely, any negative developments in these talks could push the INR even lower.
From a technical perspective, the USD/INR pair shows a clear bullish trend on multiple timeframes. On the daily chart, the pair is trading within a rising channel, approaching the upper boundary near the 91.00 level. Traders can expect sellers to emerge here, with a defined risk above the trendline, potentially triggering a pullback toward the lower channel bound. Conversely, a break above this level would attract more buyers aiming for new record highs.
The 4-hour chart also reflects recent strength, showing a rise to a new record high before a modest pullback. Sellers are likely to defend the recent high, targeting a retracement to the 89.70 support area. Buyers will seek a breakout above the high to continue pushing towards 91.00.
On the 1-hour chart, breaking above a minor resistance zone at 90.05 accelerated momentum as buyers increased their positions, aiming for further highs. A potential pullback could offer buying opportunities near 90.05 and 89.70 support levels. Sellers, meanwhile, will watch for downside breaks to extend their move toward new lows.
Looking ahead, traders should monitor tomorrow’s release of Indian inflation data, which could influence INR performance. The ongoing US-India trade talks, currently in their second day, remain another key factor to watch for possible market-moving developments.
Original Source: Giuseppe Dellamotta of investinglive.com
