USD/INR flatlines as traders await Fed’s Bowman speech

• Indian Rupee holds steady in Monday’s Asian session. 
• Robust foreign inflows and lower crude oil prices might support the INR. 
• Traders will monitor the US September Consumer Confidence and Fed’s Bowman speech on Tuesday. 

The Indian Rupee (INR) consolidated its gains on Monday after reaching its highest level since mid-July in the previous session. The local currency might be bolstered by the Federal Reserve's (Fed) recent rate cut and strong portfolio inflows into Indian markets. Additionally, the decline in crude oil prices could underpin the INR as India is the third-largest oil consumer after the United States (US) and China. 

Nonetheless, the US Dollar (USD) demand from local oil companies might help limit the pair’s losses. Investors await the US Consumer Confidence for September for fresh impetus. Also, Fed Governor Michelle Bowman is scheduled to speak later on Tuesday.  

Daily Digest Market Movers: Indian Rupee trades flat despite dovish Fed

• The flash HSBC India Manufacturing Purchasing Managers Index (PMI) eased to 56.7 in September from the previous reading of 57.5. The Services PMI declined to 58.9 versus 60.9 prior. 
• "The flash Composite PMI in India rose at a slightly slower pace in September, marking the slowest growth observed in 2024," noted Pranjul Bhandari, chief India economist at HSBC.
• Chicago Fed President Austan Goolsbee noted, “Many more rate cuts are likely needed over the next year, rates need to come down significantly.”
• Atlanta Fed President Raphael Bostic stated that cutting the cycle with a large move will help bring interest rates closer to neutral levels as the risks between inflation and employment become more balanced.
• Minneapolis Fed President Neel Kashkari said that he expects to lower interest rates by quarter-point moves at each of the central bank’s two remaining meetings this year, per Bloomberg. 
• The flash reading of the US Manufacturing PMI dropped to a 15-month low of 47.0 in September from 47.9 in August, weaker than the estimations of 48.5. Meanwhile, the Services PMI eased to 55.4 in August versus 55.7 prior, above the market consensus of 55.2.

Technical Analysis: USD/INR’s bearish bias prevails in the longer term

The Indian Rupee trades flat on the day. The USD/INR pair keeps the bearish vibe on the daily timeframe as it holds below the key 100-day Exponential Moving Average (EMA). The path of least resistance level is to the downside as the 14-day Relative Strength Index (RSI) stands in the bearish zone near 33.70. 

The first upside barrier for USD/INR emerges near the 100-day EMA at 83.68. Any follow-through buying above this level could see a rally to the key resistance level at the 84.00 psychological mark. 

On the flip side, the initial support level for the pair is located at 83.30, the low of June 19. The additional downside filter to watch is the 83.00 round mark.