USD/INR Price Analysis: Stuck in a range around 82.00, bearish breakdown seems imminent

• USD/INR extends its consolidative price move and remains confined in a one-week-old range.
• The formation of a symmetrical triangle warrants some caution before placing directional bets.
• Acceptance below the very important 200-day SMA supports prospects for an eventual breakdown.

The USD/INR pair continues with its struggle for a firm near-term direction and remains confined in a familiar trading band held over the past week or so. Spot prices remain below the very important 200-day Simple Moving Average (SMA) through the Asian session on Thursday and currently trade around the 82.00 mark, down less than 0.10% for the day.

Looking at the broader picture, the USD/INR pair has been oscillating between two converging trend lines since October 2022. This constitutes the formation of a symmetrical triangle on the daily chart and marks a consolidation phase before the next leg of a directional move. Meanwhile, acceptance below a technically significant moving average favours bearish traders and supports prospects for an eventual breakdown.

Moreover, oscillators on the daily chart have again started drifting in the negative territory and suggest that the path of least resistance for the USD/INR pair is to the downside. That said, it will still be prudent to wait for some follow-through selling below the monthly low, around the 81.75 region, before positioning for a fall towards the 81.50 support zone. Spot prices could then test sub-81.00 levels or the YTD low touched in January.

On the flip side, the 82.20 area, or the 200-day SMA, now seems to have emerged as an immediate resistance. A sustained strength beyond will reinforce the ascending trend-line support and the subsequent move up has the potential to lift the USD/INR pair back above the 82.70-82.75 intermediate hurdle. Bulls might then make a fresh attempt to conquer the 83.00 mark, which has been acting as a strong barrier since the beginning of this year.

A convincing break through the aforementioned handle will be seen as a fresh trigger for bullish traders and set the stage for an extension of the USD/INR pair's well-established uptrend witnessed since August 2022. Spot prices might then surpass the all-time peak, around the 83.40-83.45 region touched in October 2022, and aim to reclaim the 84.00 mark.

USD/INR daily chart

Key levels to watch