- USD/INR attempts a rebound as the DXY capitalizes on firmer yields.
- Acceptance above 100-DMA is critical for USD/INR buyers.
- Daily technical setup suggests a pullback before a fresh downswing kicks in.
USD/INR is posting sizeable gains in the European session this Tuesday, reversing the entire drop seen Monday.
The rebound in the pair can be attributed to the notable US dollar demand, courtesy of the sharp rally in the US Treasury bond yields.
The US yields jumped in tandem with the coronavirus cases globally while rising odds of a March Fed rate hike also helped fuel the upswing.
The upbeat sentiment around oil prices weighed negatively on the Indian rupee, in turn, collaborating with the upturn in the spot.
At the time of writing, the spot is trading close to the daily highs of 74.58, looking to find acceptance above the 100-Daily Moving Average (DMA) at 74.50.
The 14-day Relative Strength Index (RSI) is bouncing from near the oversold region, boding well for bulls, as they attempt a rebound.
The December 30 highs of 74.64 will be next on the buyers’ radars should the price close above the 100-DMA on a daily basis.
USD/INR: Daily chart
On the other hand, the bulls remain hopeful for recovery so long as the cross holds above the ascending 200-DMA at 74.27.
The downtrend from mid-December peaks of 76.59 will resume on a sustained move below the latter, exposing December 31 lows of 74.10.
Deeper declines will see a test of the 73.50 psychological levels.
USD/INR: Additional levels
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