USD/INR loses ground on RBI's potential intervention

• Indian Rupee gains traction as RBI’s intervention limits the losses.
• India's economy is estimated to grow 6.5% in this fiscal year.
• Investors will monitor the preliminary US Consumer Sentiment data for November.

Indian Rupee (INR) trades firmly on Friday as the potential intervention from the Reserve Bank of India (RBI) limited the depreciation in the local currency. In an interview with Nikkei Asia on Thursday, RBI Governor Shaktikanta Das said that geopolitical tensions across the globe have generated economic fragmentation that applies brakes and barriers to growth and supply chains, but he’s confident that India can rise amid the uncertainty.

India's economy is expected to grow 6.5% this fiscal year, the fastest-growing major economy in the world. However, the Indian Rupee’s upside seems limited as higher oil prices and the higher US Treasury bond yields remain in focus. Looking ahead, market players will monitor the preliminary US Consumer Sentiment for November, which is expected to grow to 63.7.

Daily Digest Market Movers: Indian Rupee strengthens amid the current uncertain environment

• The Reserve Bank of India (RBI) Governor Shaktikanta Das expressed optimism about India's economic prospects but warned that the route to becoming a prosperous society may not be smooth.
• RBI’s Monetary Policy Committee (MPC) in its October meeting, estimated Consumer Price Index (CPI) at 5.4% for 2023-24, a decline from 6.7% in 2022-23.
• RBI Governor Das said India remains vulnerable to recurring and overlapping food price shocks and the monetary policy remains focused on keeping inflation at the 4% target. 
• RBI forecasts India's Gross Domestic Product (GDP) will grow at 6.3% in the current fiscal year.
• The US weekly Initial Jobless Claims rose by 217K versus 220K prior, below the expectation of 218K.
• The Continuing Claims climbed to 1.834M from 1.812M in the previous week, the highest level since mid-April.
• Fed Chair Jerome Powell said they are not confident that they have achieved a sufficiently restrictive policy to bring inflation down to 2% over time.
• Fed Chair Powell further added that the Fed will not hesitate if it’s appropriate to tighten policy further.

Technical Analysis: The Indian Rupee gains ground, the upside seems limited

The Indian Rupee edges higher on the day. The USD/INR pair trades in a familiar range of 83.00–83.35 since September. According to the daily chart, the USD/INR bullish potential remains intact as the pair holds above the key 100- and 200-day Exponential Moving Averages (EMA).

The upper boundary of the trading range at 83.35 acts as a key resistance level for USDINR. A decisive break above 83.35 will pave the way to the year-to-date (YTD) highs of 83.45. The additional upside filter to watch is a psychological round figure at 84.00.

On the downside, a critical contention level will emerge at 83.00, representing the confluence of a low from October 24 and a round mark. Any follow-through selling below 83.00 will see losses extend to a low of September 12 at 82.82, followed by a low of August 4 at 82.65.