USD/INR Price Analysis: Consolidates below 82.80 US default jitters turn investors anxious

• USD/INR is oscillating in a narrow range below 83.00 as investors turn cautious due to unresolved US debt-ceiling issues.
• The RBI is expected to hold interest rates ahead as India’s inflation is decelerating.
• USD/INR is marching towards the horizontal resistance of the Ascending Triangle pattern.

The USD/INR pair is displaying a back-and-forth action below the critical resistance of 82.80 in the Asian session. The asset is expected to remain on the tenterhooks as the market mood is quite cautious due to unending negotiations over raising the current $31.4 trillion US borrowing cap limit.

The US Dollar Index (DXY) is declining towards the immediate cushion of 104.00 after a perpendicular rally as the focus has shifted to the US Durable Goods Orders data.

On the Indian Rupee front, investors are shifting their focus to the interest rate decision by the Reserve Bank of India (RBI), which is scheduled in the first week of June. Analysts at Commerzbank believe inflation in India is also showing signs of peaking, with headline inflation dipping back to the 2-6% target range in April. This provides RBI scope to stay on hold for the foreseeable future. At the same time, it is too early to discuss rate cuts by RBI.

USD/INR is marching towards the horizontal resistance of the Ascending Triangle chart pattern forming on the daily scale. The horizontal resistance of the aforementioned chart pattern is plotted from 03 November 2022 high at 83.18. While the upward-sloping trendline is plotted from 11 November 2022 low at 80.38.

Upward-sloping 10-period Exponential Moving Average (EMA) at 82.62 is providing a cushion to the US Dollar bulls.

The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, which indicates that the upside momentum is already active.

For an upside move, a decisive break above May 23 high at 82.97 will drive the asset toward 03 November 2022 high at 83.18 followed by all-time high at 83.42.

In an alternate scenario, a downside move below May 24 low at 82.57 will further drag the asset toward 29 September 2022 high at 82.22. A slippage below the latter will further drag the asst toward the round-level support at 82.00.

USD/INR daily chart