The USD/INR price remained in a consolidation phase on Monday morning as investors focused on the actions by the Reserve Bank of India (RBI) and the Federal Reserve. It was trading at 79.65, which was slightly below the year-to-date high of 80.21. The Indian rupee has crashed by more than 10% from its highest point in 2021.
What next for the Indian rupee?
The Indian rupee has emerged as one of the best-performing currencies this year. While it has crashed by 10% this year, it has done better than other currencies that are down by over 15%. This includes currencies like the Turkish lira, British pound, and the Japanese yen.
The Indian rupee has done well because of the country’s neutral stance on Ukraine. While the country has condemned the violence, it has still maintained close military and trade ties. As a result, India has continued to import a vast of cheap natural gas and oil from Russia.
This has helped its industries to withstand pressure from high costs. As a result, India’s wealthiest individuals like Adani and Mukesh Ambani have outperformed their global peers. Analysts expect that India’s economy will grow by 7% in 2023, outperforming that of China and other emerging markets.
The next key catalyst for the USD to rupee exchange rate will be the upcoming housing data from the United States. Analysts expect the data to show that housing starts, building permits, and new home sales pulled back in September amid high-interest rates. There will be no major data from India this week.
The daily chart shows that the USD/INR price has been in a strong bullish trend in the past few months. This increase saw it jump to an all-time high of 80.21. Now, it has moved above all moving averages and is between the ascending channel.
Recently, the pair has consolidated at the highest point this year. Therefore, the pair will likely have a bullish breakout in the coming weeks. If this happens, the next key resistance level to watch will be at 81. This view will be confirmed if it moves above the resistance at 80.05. A drop below the support at 79 will invalidate the bullish view.