- USD/INR remains sold-off into the oil price retreat and easing USD.
- Wednesday’s RBI meeting remains focus, with another rate hike due.
- Bullish 21-DMA could rescue bulls, as RSI still remains above the midline.
USD/INR is reversing Friday’s rally, having met resistance near the 77.70 region, as sellers remain in control so far this Monday.
The Indian rupee benefits from the retreat in oil prices while a pause in the US dollar rebound across the board also collaborates with the renewed downside in the pair.
The dollar eases amid the upbeat market mood, as Beijing is set on a gradual covid reopening path this week. The pullback in oil prices is also helping calm the market nerves.
The spot rallied hard on Friday, tracking the dollar gains after the US labor market report eased market concerns over an economic slowdown.
All eyes remain on Wednesday’s Reserve Bank of India’s (RBI) monetary policy decision for the next big move in the USD/INR pair.
Technically, USD/INR is looking to retest the bullish 21- Daily Moving Average (DMA) at 77.54 on its way south once again.
If the latter is cleared on a sustained basis, then a drop towards Friday’s low of 77.38 will be inevitable.
The last line of defense for bulls is seen at the round figure of 77.00.
The 14-day Relative Strength Index (RSI) has turned south but remains well above the midline, suggesting that the retreat appears capped.
USD/INR: Daily chart
Alternatively, if the 21-DMA support holds fort, then a rebound towards the previous week’s high of 77.73 will be in the offing.
The next critical resistance is aligned at 77.89, which is the falling trendline hurdle.
USD/INR: Additional levels to consider
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