USD/INR Price Analysis: Corrects to 83.00 resistance breakpoint, bullish bias remains

• USD/INR meets with some supply on Thursday and retreats further from the record high.
• A strong bullish tone surrounding the USD should limit any meaningful corrective slide.
• This week's breakout through the 83.00 stiff barrier adds credence to the positive outlook.

The USD/INR pair edges lower during the Asian session on Thursday and moves further away from the record high touched earlier this week. Spot prices slide back to the 83.00 strong horizontal resistance breakpoint, though seems poised to prolong the recent upward trajectory witnessed over the past three weeks or so.

The minutes of the July 25-26 FOMC policy meeting signalled that a further rate hike remains in play later this year, which remains supportive of a further rise in the US Treasury bond yields and continues to underpin the US Dollar (USD). Apart from this, the prevalent risk-off environment could further benefit the safe-haven Greenback and help limit any meaningful corrective decline for the USD/INR pair, at least for the time being.

Even from a technical perspective, this week's breakout through the 83.00 round-figure mark, which has been acting as a strong barrier since November 2022, supports prospects for a further near-term appreciating move for the USD/INR pair. Hence, any subsequent slide is likely to attract fresh buyers near the 82.80-82.75 region. This is followed by the 82.60-82.55 support, which should now act as a strong base for spot prices.

The positive outlook is reinforced by the fact that the Relative Strength Index (RSI) on the daily chart has already pulled back from the vicinity of the overbought territory. This, in turn, suggests that the path of least resistance for the USD/INR pair is to the upside. That said, bulls might now wait for some follow-through buying beyond the 83.40 area, or the record high before positioning for a move towards the 84.00 round-figure mark.

USD/INR daily chart

Technical levels to watch