USD/INR Price Analysis: Aims to test 83.00 as oil extends firmer recovery

• A recovery in the US Dollar Index is indicating extreme uncertainty in the FX domain.
• The asset has comfortably established above the downward-sloping trendline plotted from 83.43.
• Advancing 20-and 50-EMAs add to the upside filters.

The USD/INR pair has shifted its auction profile above the critical hurdle of 82.50 in the Asian session. The asset is aiming higher as the US Dollar Index (DXY) has recovered after dropping to near 104.90, displaying sheer volatility ahead of the United States inflation data.  

The risk profile is displaying mixed responses as a lower consensus for US inflation is supporting markets while anxiety among investors is capping the upside. Meanwhile, the oil price has surpassed the critical hurdle of $74.00. Asian economies significantly bank upon oil imports to cater to their domestic needs. Therefore, advancing oil prices are impacting the Indian Rupee.

On a four-hour scale, the pair has comfortably established above the downward-sloping trendline plotted from October 19 high at 83.43. The 20-and 50-period Exponential Moving Averages (EMAs) at 82.47 and 82.19 respectively are advancing, which adds to the upside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that upside momentum is active.

Going forward, a break above December 7 high at 82.77 will drive the asset towards the round-level resistance at 83.00, followed by October 19 high at 83.43.

On the contrary, a slippage below Friday’s low at 82.08 will drag the asset towards November 25 low at 81.41 and December 01 low at 81.00.

USD/INR four-hour chart