USD/INR Price Analysis: Consolidates around 82.00 mark, seems vulnerable below 200-day SMA

• USD/INR oscillates in a narrow trading band through the Asian session on Monday.
• Last week’s sustained breakdown below the 200-day SMA favours bearish traders.
• A sustained strength beyond the 82.30 area is needed to negate the negative bias.

The USD/INR pair struggles to capitalize on Friday's modest bounce from the 81.85 region, or its lowest level since May 9 and kicks off the new week on a subdued note. Spot prices oscillate in a narrow trading band through the Asian session and currently trade just below the 82.00 mark, nearly unchanged for the day.

From a technical perspective, last week's sustained break and acceptance below the very important 200-day Simple Moving Average (SMA) was seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, in turn, reaffirms the negative outlook and suggests that the path of least resistance for the USD/INR pair is to the downside.

Hence, a subsequent slide towards testing the next relevant support, near the 81.70-81.65 region, looks like a distinct possibility. Some follow-through selling will make a fresh breakdown and pave the way for an extension of the recent retracement slide from the vicinity of the 83.00 round-figure mark witnessed over the past four weeks or so.

On the flip side, the 200-day SMA, currently pegged around the 82.10 area, now seems to act as an immediate hurdle ahead of the 82.30 horizontal zone. A sustained strength beyond, however, might negate the negative outlook and trigger some near-term short-covering move. The USD/INR pair might then climb back towards the 82.70-82.75 hurdle before making a fresh attempt to conquer the 83.00 mark.

USD/INR daily chart

Key levels to watch