Tariff Concerns Weigh on Rupee While USD/INR Holds Steady

Key Moments

The US dollar initially fell after the US Supreme Court struck down Trump’s reciprocal tariffs, before recovering most of its losses.
The Indian Rupee remains in a broader downtrend against the USD, with gains from a recent US-India trade deal fading after tariffs were swiftly reimposed.
USDINR is trading higher within a rising channel, with dip-buying interest near support and the 93.00 area in focus as an upside target.

Fundamental Overview

US Dollar: Weaker on Legal Shock, Stabilizing as Traders Await Data

The US dollar declined broadly on Friday after the US Supreme Court invalidated Trump’s reciprocal tariff measures. Market participants appeared to react to the renewed policy uncertainty, even though the practical framework for tariffs has not materially shifted.

Trump has already introduced fresh tariffs under a separate legal authority, and USTR Greer has emphasized that existing tariff agreements remain intact and will be observed. In addition, the new measures lower the effective average tariff rate.

Following the initial selloff, the dollar recovered the bulk of its losses. For now, it may stay confined to a range as investors look for new catalysts and clarity around trade and policy.

The main looming risks center on a possible military flare-up between the US and Iran, which could lift the dollar in a severe risk-off scenario, and a potential hawkish repricing if incoming US data strengthens, which would be supportive for the greenback. Fed’s Waller placed a great deal on next week’s NFP report.

Indian Rupee: Structural Weakness Persists Amid Tariff Uncertainty

The Indian Rupee continues to trade in a structurally bearish trend against the US dollar. A short-lived boost followed the US-India trade deal that cut tariffs to 18%, but that support faded and the currency resumed its downward path.

The US Supreme Court decision on Trump’s tariffs on Friday briefly propelled the Rupee higher on hopes for reduced tariff burdens. However, Trump rapidly reinstated tariffs under different laws, and the Rupee’s gains were largely unwound.

This sequence has injected fresh short-term uncertainty. In response, both governments have agreed to postpone trade discussions that had been planned for this week “until both sides are able to study the implications of recent developments”.

Trump has threatened to impose higher tariffs on countries that “play games” with recent trade deals, so it wouldn’t be surprising to see him doing something crazy out of the blue. This is a risk that could keep weighing on the Rupee.

USDINR Technical Analysis

Timeframe	Key Levels / Structure	Bias / Focus
Daily	Channel support; 89.50 downside target; 93.00 trendline resistance	Gradual grind higher within channel; buyers active on dips
4-hour	Break above 91.00 resistance turned support; consolidation zone	Dip-buying near 91.00; watching for breakout from range
1-hour	Range-bound price action	Traders likely to trade the range until a clear break occurs

Daily Chart: Buyers Target Upper Channel Boundary

On the daily chart, USDINR has been edging higher as dip-buyers step in near the lower boundary of the rising channel. The upside focus remains on the upper trendline, located around the 93.00 region.

Sellers will be looking for a decisive move below the channel floor to signal the potential for a deeper decline, with the 89.50 area highlighted as the initial downside target if that breakdown occurs.

4-Hour Chart: Support Forms Around 91.00

The 4-hour view shows that USDINR has broken above a key resistance band around the 91.00 handle and then moved into a consolidation phase. The brief drop lower coincided with the US Supreme Court ruling, but that move was quickly reversed.

Buying interest is likely to remain strong near the 91.00 support zone as participants attempt to push the pair toward new highs. At the same time, those looking for a corrective phase will focus on a clean break below 91.00, which could open scope for a retreat toward the lower boundary of the channel.

1-Hour Chart: Range Trading Dominates

On the 1-hour timeframe, market structure remains largely unchanged, with price oscillating within a well-defined range. Traders are expected to continue trading this band until a breakout occurs on either the upside or downside.