Despite a weaker US Dollar (USD), the Indian Rupee (INR) is trading on a softer note. Recent data from the Ministry of Statistics and Programme Implementation reveals that India’s retail inflation reached a four-month high of 5.69% in December, slightly below market expectations but still above the Reserve Bank of India’s (RBI) medium-term target of 4%.
Technical Analysis: Short-Term Weakness for Indian Rupee
The USD/INR pair has been trading within the 82.80-83.40 range since September 2023. From a technical perspective, the pair shows a bearish tone, staying below the key 100-period Exponential Moving Average (EMA) on the daily chart. The 14-day Relative Strength Index (RSI) is below the 50.0 midpoint, indicating a downside bias.
A breach of the crucial support level at 82.80 could lead to a drop to the September 12 low of 82.60, with the next support level near the August 11 low at 82.40. On the upside, the 83.00 level acts as an immediate barrier, followed by the upper limit of the trading range at 83.40 and the psychological level at 84.00. The analysis suggests a cautious outlook for the Indian Rupee in the short term.