- USDINR is on a roll with the rupee susceptible to extended losses amid rising risk-off sentiment underlined by trade tariff fears.
USDINR has stayed on the upside for the third successive session as a blend of trade tariff jitters, high corporate dollar demand and broader dollar strength subdue the rupee. The forex pair traded at 86.03 at the time of writing, up by 0.3% on the daily time line. US President Donald Trump’s 30% trade tariff threat against Mexico and the EU has injected a risk-off sentiment across markets.
India’s benchmark indices, the Nifty 50 Index and Sensex Index are on a three-session losing streak, underlining a cautious investor posture. Trade negotiations between India and the US are yet to be concluded and that predisposes it to elevated tariffs starting August 1.
Meanwhile, many Indian large cap corporations, especially tech companies, manufacturers and importers of commodities like oil have payments due in July to settle foreign supplier settlements and interest payments, which are primarily denominated in dollars. That has raised the demand for the greenback, bringing strong upside propulsion.
Furthermore, the USDINR upside reflects the US dollar’s broader strength in recent days. The DXY index has been on a strong uptrend since the beginning of July, and hit two-week highs of 98.10 today. The rupee’s ability to hold above 86.00 will be critical to preventing the onset of bearishness, but continued surge in demand for the dollar or an escalation of trade tariff risk could limit traction.
USDINR Prediction
USDINR pivots at 85.90 and the upside will continue if action stays above that level. The momentum will likely push the action higher and meet the first resistance at 86.02. Breaking above that level will signal a stronger momentum that could extend gains to test 86.16.
Conversely, breaking below 85.90 will invite the sellers to take control. That will likely see initial support established at 85.79. The upside narrative will be invalid below that level. An extended control by the sellers could send the action lower to test 85.66.
