Indian Rupee Steadies as Lower Oil Offsets Dollar Strength

Key Moments

USD/INR has hovered near 94.60 for two weeks, with the pair trading around 94.65 on Tuesday in a subdued, range-bound manner.
Lower crude prices, helped by a maintained ceasefire between the US and Iran, have continued to underpin the Indian Rupee.
Foreign Institutional Investors were net sellers on Monday, divesting Indian equities worth Rs. 1,350.10 crore despite improved earnings projections from lower oil prices.

Rupee Steadies as Markets Await US Labor Data

The Indian Rupee (INR) is trading in a narrow band against the US Dollar (USD) on Tuesday as market attention shifts to a series of upcoming US economic releases. The USD/INR pair has lacked clear direction for the past two weeks, staying close to 94.60. This comes as the Greenback edges higher amid investor caution ahead of the United States (US) Nonfarm Payrolls (NFP) data for June, which is scheduled for release on Thursday.

At the time of writing, the US Dollar Index (DXY) – a measure of the USD against six major peers – is up 0.2% and trading near 101.32.

US Jobs Data in Focus as Fed Communication Shifts

The upcoming US NFP report remains a key reference point for expectations around the Federal Reserve’s (Fed) interest rate path. Its influence is seen as particularly elevated this time after comments from new Fed Chairman Kevin Warsh at his monetary policy conference this week indicated a shift away from providing explicit forward guidance.

“Absent, also, is so-called forward guidance—which we agreed was not well suited to the current policy conjuncture,” according to the transcript of Fed Chairman Warsh’s Press Conference.

Consensus estimates suggest the US economy created 110K new jobs, compared with 172K in May, while the Unemployment Rate is projected to remain unchanged at 4.3%.

Later on Tuesday, investors will watch the US JOLTS Job Openings report for May, due at 14:00 GMT. Expectations point to 7.3 million job openings, below the 7.618 million reported in April.

Through the week, markets will also track the US ADP Employment Change and the ISM Manufacturing PMI for June, both scheduled for release on Wednesday.

Cheaper Crude Provides a Cushion for the Rupee

Lower oil prices, supported by the continuation of a ceasefire between the US and Iran, are helping limit downside pressure on the Indian Rupee.

Currencies from oil-import-dependent economies such as India often see relative support when crude prices remain subdued, as lower energy import costs tend to improve external balances and corporate earnings.

At the same time, Iran is pressing for recognition of its authority in waters near the Strait of Hormuz, a crucial route for nearly 20% of global energy flows, and has been discussing the issue with Oman.

On Monday, Iranian Deputy Foreign Minister Kazem Gharibabadi stated in a post on X, formerly known as Twitter, that Tehran has concluded a meeting with Oman in which it reviewed current issues related to the Hormuz, and also exchanged views on the future management of the waterway.

Foreign Investors Remain Net Sellers in Indian Equities

Foreign Institutional Investors (FIIs) continued to reduce exposure to Indian equities on Monday, even as lower oil prices have enhanced earnings projections for Indian companies. FIIs were net sellers, offloading shares worth Rs. 1,350.10 crore.

USD/INR Technical Picture: Bearish Bias Within a Descending Triangle

USD/INR is trading near 94.65, maintaining a bearish short-term tone as it remains below the 20-period Exponential Moving Average (EMA) at 94.80 and below the downward-sloping boundary of a Descending Triangle pattern, with a break level located at 95.18.

The pair has retreated into the lower half of its recent trading band. The Relative Strength Index (RSI) stands at 47, signaling neutral-to-soft momentum rather than oversold conditions and indicating that selling pressure persists, albeit without signs of capitulation.

Technical Level	Description	Level
Spot price (approx.)	Current USD/INR level	94.65
Immediate resistance	20-period EMA	94.80
Key resistance	Descending Triangle break level	95.1822
Distant resistance	Origin of bearish trendline	97.0285
Major support	Horizontal boundary of Descending Triangle	94.00
Next support	April 15 high	93.47
Momentum indicator	RSI	47

On the upside, the first obstacle is the 20-period EMA at 94.80, followed by the descending trendline break level at 95.1822. The origin of that bearish trendline near 97.0285 serves as a more distant resistance area. On the downside, the horizontal floor of the Descending Triangle around 94.00 is the key support; a decisive move below this region would open a path toward the April 15 high at 93.47.

(The technical analysis of this story was written with the help of an AI tool.)