- Summary:
- USD/INR Forecast: The Indian Rupee is gaining strength against US dollar this week, despite a surge in DXY index.
USD/INR is showing weakness this week as the pair slid 0.30%. The US Dollar to Indian Rupee exchange rate is dipping despite a rise in the dollar strength index. This suggests that the Indiana Rupee is showing strength in terms of the greenback.
On Friday, USD/INR showed a negative price action, and the pair was trading 0.16% lower during its London session. This translates into a weekly loss of 0.31%. In this article, we discuss the factors likely to affect Indian Rupee in the coming weeks and months.
USDINR Shruggs Off Strength In DXY Index
The dollar strength index has been on a rally lately. The DXY index experienced a strong bounce from its yearly lows and has surged to its highest level since March 17. Most of the time, a rising DXY weakens the USD/INR exchange rate. However, this hasn’t been the case this time.
The rise in the dollar strength index appears to be a technical bounce. This is because the index had been consolidating around its 101 points support for the past few weeks. The bounce in DXY resulted in a rally in USDINR, which seems to have ended now.
USD/INR Gets Rejected From Resistance
The following chart of the US Dollar to Indian Rupee shows that the price has faced another rejection from its resistance at the 83 level. This level has resulted in multiple pullbacks in the past few months and only a reclaim of this level can make USD/INR forecast bullish.
Considering the latest inflation data and the state of the global markets, I expect US Dollar to Indian Rupee exchange rate to remain sideways in the coming days. On a daily timeframe, the pair is once again attempting a breakdown from ascending triangle pattern.
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