USD/INR Prediction Ahead of the Fed and RBI Rate Decisions

Summary:
• USD/INR price has been moving sideways in the past few days as investors focus on Fed rate decision and next week's Reserve Bank of India

The USD/INR price has been moving sideways in the past few days as investors focus on this week’s Fed interest rate decision and next week’s Reserve Bank of India (RBI) meeting. The pair is also waiting for this week’s blockbuster earnings calendar. It is trading at 79.70, which is slightly below the all-time high of 80.22.

Fed and RBI decisions 

The USD to INR price has been in a strong bullish trend in the past few months as the US dollar strength continues. The dollar index surged to $109.30 this month, the highest level in more than three decades.

The next key catalyst for the USD/INR price will be the Federal Reserve decision scheduled for Wednesday. Analysts expect that the Fed will decide to hike the interest rate by 75 basis points as inflation continues soaring. Data published earlier this month showed that the country’s inflation rose to 9.4% in June, the highest point in over four decades. 

The USD to INR price will also react to important economic data from the United States like the upcoming consumer confidence, GDP, and PCE numbers. 

The pair will next react to the latest interest rate decision by the Reserve Bank of India that is scheduled for August 4th. The bank is also expected to hike interest rates in this meeting since India’s inflation is surging. However, analysts believe that the bank will not be extremely hawkish like its global peers.

The USD/INR will also react to a slew of earnings from both India and the United States. Some of the top Indian companies that will publish their results are ICICI Bank, Infosys, and Tata Motors. Companies like Apple and Google will publish their results in the United States. 

USD/INR price forecast

The four-hour chart shows that the USD to INR exchange rate has been in a strong bullish trend in the past few months. The pair found strong resistance at 80. It has moved between the 20 and 50-day simple moving averages, while the Relative Strength Index (RSI) has formed a bearish divergence pattern. 

Therefore, the pair will likely resume a downward trend as sellers target the key support at 79.50. A move above the resistance at 80 will invalidate the bearish view.