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USD/INR: US Dollar to Indian Rupee Forecast

USD/INR: US Dollar to Indian Rupee Forecast

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USD/INR continues to hold beneath the significant 80.00 level as the Indian rupee attempts to recover ground against the US dollar.

The rupee is softer against the greenback at the start of the European trading session. Currently, the dollar to the rupee exchange rate is 79.57, up 0.10 (+0.13%) on the day.

Notably, the pair has spent three days nudging against the 50-Day Moving Average (DMA) at 79.60, which has so far capped the upside.

The rupee’s stability follows improving sentiment after Tuesday’s meltdown in US equities. American markets suffered one of the biggest one-day drawdowns in recent times after the Consumer Price Index (CPI) came in above forecast. The inflation gauge was expected to show prices rose 8.1% (annually) in August. However, the 8.3% number showed inflation slowed less than expected. As a result, the dollar surged against peers, including the rupee, which fell 0.33% on Tuesday.

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Today’s Data

The dollar is expected to trade in a tight range ahead of a raft of economic data from across the pond later today.

Economic data releases today include the Retail Sales figure for August, Initial Jobless claims, and the Philadelphia Fed manufacturing Index. Additionally, the US import and export price indices, and Industrial production numbers could affect the US dollar.

Dollar to Rupee Outlook

The daily price chart shows USD/INR is testing the resistance of the 50-DMA at 79.60 (green line). A daily close above the indicator will be constructive, likely leading to more gains. In this event, the psychological resistance at 80.00 is the next level to watch. Above that, the path to new highs is clear.

On the downside, the 100-DMA at 78.70 (blue) is the first significant support level. Should USD/INR breach the 100-DMA, we would expect further rupee strength. here, the significant long-term 200-DMA at 77.06 (red) becomes a viable target.

Considering the importance of the 50-DMA, our immediate view is neutral. This view changes to bullish on a daily close above 79.60. Whereas, we become bearish the longer the rate stays below that level.

USD/INR Price Chart

us dollar to Indian rupee USD/INR
Elliot Laybourne
Elliott is a former investment banker with a 20 year career in the city of London. During this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making. During this time, Elliott’s client list included Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and the Pennsylvania State Public School Employees Retirement System, amongst others. Today, he splits his time between Thailand and Dubai, from where he provides trading consultancy and business development services for family office and brokerage clientele.