USD/INR Price Analysis: Remains inside the woods despite a sell-off in USD Index

The USD/INR pair has sensed pressure while attempting to climb above the immediate resistance of 81.75 in the Asian session. The asset has been oscillating in a narrow range for the past week despite a sheer decline in the US Dollar Index (DXY).

It looks like a solid recovery in the oil price has offset the decline in the USD Index and the context is keeping the asset inside the woods. The oil price has shown a stellar recovery as investors expect that the majority of central banks have reached threshold levels and the worst is getting over. It is worth noting that India is one of the largest importers of oil in the world and higher oil prices impact the Indian rupee.

This week, the release of the US inflation data will be keenly watched, which is scheduled for Wednesday. Also, the Indian economy will have its inflation report on Friday.

USD/INR is oscillating in a narrow range of 81.64-81.95 for the past week, indicating a decline in volatility contraction. It seems that the release of inflation figures will trigger a power-pack action in the asset.

The 20-period Exponential Moving Average (EMA) at 81.73 is stuck to the major, portraying a rangebound performance.

Also, the Relative Strength Index (RSI) (14) is locked in the 40.00-60.00 range, hinting at an absence of momentum.

Going forward, a breakdown of the consolidation range below 81.60 will expose the asset to April 14 low at 81.50 followed by 26 January low at 81.36.

On the flip side, a strong move above May 02 high at 81.95 will drive the major toward April 26 high at 82.12. A breach of the latter will add more gains in the asset by pushing it toward April 21 high at 82.30.

USD/INR two-hour chart