USD/INR remains stable as likely RBI intervention limits losses

The Indian rupee rate remains unchanged during Friday’s Asian session.
Demand for the dollar from foreign banks may weigh on the INR, but RBI’s intervention may aid limit its losses.
U.S. housing market and industrial production data for December will be released later on Friday.

The Indian rupee (INR) remained unchanged on Friday. Likely intervention by the Reserve Bank of India (RBI) to sell the US dollar (USD) through state-owned banks helps curb excessive losses. However, offers in USD from importers and foreign banks, especially oil companies, may weigh on the local currency. Additionally, geopolitical uncertainty and potential US trade tariffs imposed by US President-elect Donald Trump may weaken the INR in the near term.

Looking ahead, investors are preparing for December data from the U.S. housing market, including building permits and housing starts. US industrial production will also be published.

The Indian rupee remains stable due to importer demand

“Most foreign banks bought dollars while RBI sold dollars to limit depreciation near the level of 86.50/$1, after which there was more depreciation to 86.55/$1,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors .
India’s trade deficit narrowed to $21.94 billion in December from $37.84 billion in November due to a significant decline in gold and oil import bills, the Ministry of Commerce and Industry said on Wednesday.
According to the U.S. Census Bureau on Thursday, U.S. retail sales rose 0.4% m/m in December compared to the previous boost of 0.8% (adjusted from 0.7%). This reading was weaker than market expectations assuming an boost of 0.6%.
The number of novel unemployed people in the US increased to 217,000. in the week ending January 10 compared with 203,000. from the previous week (corrected from 201,000). This reading was above the market consensus of 210,000.
Fed Governor Christopher Waller said Thursday that the U.S. central bank could cut interest rates multiple times this year if inflation falls as he expects.
According to Reuters, Chicago Fed President Austan Goolsbee noted that he was increasingly confident that the labor market was stabilizing.

USD/INR maintains constructive bias, overbought RSI warrants caution for bulls in the tiny term

The Indian rupee rate remains stable throughout the day. The path of least resistance is up as the USD/INR pair has formed higher highs and higher lows, holding above the key 100-day exponential moving average (EMA) on the daily chart. However, the 14-day Relative Strength Index (RSI) is reaching overbought territory above the 70.00 level, potentially signaling momentary weakness or further consolidation in the near future.

For the bulls, the immediate resistance level appears at an all-time high of 86.69. A significant break above the mentioned level will potentially bring some buyers to the psychological level of 87.00.

If bearish momentum continues, the pair could fall to 86.30, the January 15 low. Further south, the next downside target is 85.85, the January 10 low, followed by 85.65, the January 7 low.