USD/INR faces some selling pressure, eyes on Indian, US S&P PMI data

• Indian Rupee recovers some lost ground on the softer US Dollar. 
• The Fed remains on hold; dovish comments from Fed’s Powell during the press conference weighed on the Greenback. 
• Market players await the Indian HSBC PMI and US S&P Global PMI data on Thursday. 

Indian Rupee (INR) trades on a stronger note on Thursday amid the decline of the US Dollar (USD) after the Federal Reserve's (Fed) monetary policy meeting. The Fed held interest rates steady at its March meeting, as widely expected by the markets. Nonetheless, the dovish comments from Fed Chair Jerome Powell during the press conference have exerted some selling pressure on the Greenback and created a headwind for the USD/INR pair. 

Moving on, traders will keep an eye on the Indian HSBC Manufacturing and Services Purchasing Managers Index (PMI), due on Thursday. The weaker-than-expected data might weigh on the INR and cap the pair's downside. On the US docket, the preliminary S&P Global PMI for March, the weekly Initial Jobless Claims, and Existing Home Sales will be released later. 

Daily Digest Market Movers: Indian Rupee stays firm amid global influences

• Krishnamurthy Venkata Subramanian, India's executive director at the International Monetary Fund (IMF), stated on Wednesday that India needs to grow at 8% on a sustained basis to generate sufficient jobs to reduce poverty and inequality.
• The Reserve Bank of India (RBI) has projected GDP growth for the next financial year at 7%, based on improved household consumption and an upturn in the private capex cycle.
• The Fed held the rate steady at 5.25–5.50% at its March meeting on Wednesday, with the median dot plot for 2024 unchanged from the 75 basis points (bps) of cuts shown in the December projections. 
• Fed Chair Jerome Powell noted during the press conference that strong labour market data wouldn’t deter the central bank from cutting rates. The Fed will wait for more evidence that inflation is sustainably moderating toward its 2% target.
• Investors have priced in a 75% odds that the Fed will start cutting the rate in the June meeting, according to the CME FedWatch Tool. 

Technical Analysis: Indian Rupee remains capped within a long-term band

Indian Rupee trades strongly on the day. USD/INR faces rejection near the upper boundary of the descending trend channel and remains stuck within a multi-month-old descending trend channel around 82.60–83.15 since December 8, 2023. 

In the near term, the bullish outlook of USD/INR remains intact as the pair holds above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The upward momentum is confirmed by the 14-day Relative Strength Index (RSI), which lies above the 50.0 midline, suggesting that further upside looks favorable. 

The key upside barrier for the pair will emerge near the upper boundary of the descending trend channel at 83.15. A bullish breakout above this level could draw in USD/INR bulls and push the pair back to a high of January 2 at 83.35, followed by the 84.00 psychological level.

On the flip side, the first downside target is seen at the resistance-turned-support level at the 83.00 mark. Any follow-through selling below 83.00 could extend its downswing to a low of March 14 at 82.80. Further south, the next contention level is located at the lower limit of the descending trend channel at 82.60. A breach of this level might drag USD/INR to a low of August 23 at 82.45.