USD/INR Price News: Indian rupee corrects after running into 100-DMA barrier

• USD/INR attempts a tepid bounce, snapping a three-day downtrend.
• US dollar index is off monthly lows amid firmer Treasury yields.
• Daily technical setup suggests a minor rebound could be in the offing.

USD/INR is trading in the green for the first time in four trading days on Thursday, as bulls come up for the last dance before the sell-off resumes.

The pair rebounds from monthly lows of 74.46, tracking the broad bounce in the US dollar across the board. The US dollar index hit fresh one-month lows of 95.76 on Wednesday, although staged a modest recovery on rising Treasury yields. At the time of writing, the gauge is trading at 95.91, modestly flat on the day.

“It looked yesterday that the rupee’s rally had run its course. It now appears that it has a decent chance to finish the year above the 74.50 level. There are a host of risks the rupee faces in the New Year and the current levels are not justified. However, right now it’s all about momentum, low liquidity, and position adjustments, Reuters reports, citing a dealer at a private bank.

Technically, USD/INR is bouncing off critical support of the 100-Daily Moving Average (DMA), now at 74.53.

If the recovery momentum extends, then a fresh upswing towards the horizontal 50-DMA at 74.94 will be on the table.

Acceptance above the latter will expose the 75.50 psychological level.

The 14-day Relative Strength Index (RSI) is recovering from lower levels, backing the upturn in USD/INR price.

USD/INR: Daily chart

Only a daily closing below the 100-DMA could re-ignite fresh selling interest in the spot, putting the 200-DMA support at 74.24 back on buyers’ minds.

Further south, the 74.00 round number will be the level to beat for USD/INR bears.

USD/INR: Additional levels