- The momentum on USDINR calls for an extended upside, and could turn bullish with India reluctant to stop buying Russian oil.
USDINR has risen for the second successive session as the rupee faces headwinds related to rising trade tensions with the United States. The currency pair had hit a a new all-time high of 87.98 at the time of writing, and had gained nearly 1% in under 48 hours. US President Donald Trump on Monday threatened India with trade tariff rates as high as 100% in an attempt to deter the South Asian nation from purchasing Russian oil.
In late July, Trump gave Russia an “ultimatum” to stop its war against Ukraine in 10-12 days and has inferred a potential escalation of the confrontation with Russia, including military action. Russian oil is comparatively cheaper and India is reluctant to stop buying it, as it is central to its economic growth. Furthermore, it is the world’s third-largest importer of oil and cheaper crude means a stronger rupee and limits the USDINR pair’s upside. Official data shows that India purchased an average of 1.5 million barrels per day of Russian oil in the first half of 2025.
With the tariff threat rising, it is highly likely that the Reserve Bank of India (RBI) could cut interest rates in its forthcoming review. That could add to the downward pressure on the rupee and add tailwinds to USDINR. However, the RBI still has other tricks up its sleeve and could intervene in other ways to cushion the rupee.
USDINR Prediction
USDINR pivot mark is at 87.70 and action above that level signals control by the buyers. With that momentum in play, the pair will likely register further gains and potentially meet the first resistance at 88.00. An extended bullishness will break above that level and could push the action higher to test 88.10.
Conversely, the momentum will favour the sellers if the pair breaks below 87.70. That will likely see initial support level established at 87.50. Breaking below that level will invalidate the upside narrative, and the resulting momentum could result in an extended decline to test the second support at 87.30.
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