USD/INR attracts some buyers, eyes on RBI rate decision, US NFP data

• Indian Rupee trades in negative territory on the stronger USD demand. 
• The escalating Middle East geopolitical tensions and the rise in oil prices weigh on the INR. 
• The RBI will announce the interest rate decision on Friday, which is expected to leave the repo rate unchanged at 6.50%.

Indian Rupee (INR) loses its recovery momentum on Friday amid persistent US Dollar (USD) demand, which is most likely from importers. Meanwhile, the rising geopolitical tensions in the Middle East and the upsurge in oil prices exert some selling pressure on the INR and lift the safe-haven currency like the Greenback. However, the downside of the local currency might be limited by the RBI's two-way FX intervention to keep the INR stable. 

The RBI Monetary Policy Committee (MPC) will announce the interest rate decision on Friday at 4.30 GMT. Markets widely anticipate the Indian central bank to keep the repo rate unchanged at 6.50% and cut the rates in the third quarter. On the US docket, the US employment data, including Nonfarm Payrolls (NFP), Unemployment Rate, and Average Hourly Earnings for March, will be in the spotlight. The US NFP figure is estimated to see 200K jobs added to the US economy in March.

Daily Digest Market Movers: Indian Rupee remains weakened amid geopolitical tension 

• The CIA on Thursday reportedly warned Israel that Iran will attack within the next 48 hours after Israel attacked Tehran's consulate in Syria, killing two Iranian military leaders, per the Express. 
• India’s HSBC Service PMI rose to 61.2 in March from 60.6 in February, better than market expectations.
• The INR will strengthen only marginally against the USD over the coming three months as the RBI uses its FX reserves to manage volatility and keep the currency relatively strong, according to a Reuters poll. 
• The INR exchange rate would be unaffected by the recent volatility in the currency's exchange-traded derivatives, which was caused by traders unwinding positions to comply with a central bank rule, four bankers said on Thursday.
• The US Initial Jobless Claims for the week ended March 30 rose by 9,000 to 221,000 from the previous week of 212,000, below the market consensus of 214,000. The Continuing Claims declined by 19K to 1.791M in the week ended March 23. 
• Fed Bank of Richmond President Thomas Barkin said disinflation is likely to continue, but the speed of that remains unclear. He further stated that maintaining rates 'somewhat restrictive' will bring inflation back to target. 

Technical analysis: USD/INR prospects remain positive in the longer term

The Indian Rupee trades weaker on the day. The bullish stance of USD/INR remains unchanged in the long term since the pair has risen above a nearly four-month-old descending trend channel since March 22. 

In the short term, USD/INR is above the key 100-day Exponential Moving Average (EMA) on the daily chart, with the 14-day Relative Strength Index (RSI) holding in bullish territory around 65.0. This suggests that support zones are more likely to hold than to break.

A break past a high of April 3 at 83.55 could pave the way to the next resistance level at an all-time high of 83.70 en route to the 84.00 psychological round mark. On the flip side, the first downside target will emerge near a high of March 21 at 83.20. The potential support level is located at the 83.00–83.50 zone (round mark, the 100-day EMA). A breach of this level could see a drop to a low of March 14 at 82.80.