USD/INR Price Analysis: Faces resistance around 82.40 as USD Index drops further

• USD/INR has sensed resistance around 82.40 amid weakness in the USD Index.
• The Indian Rupee will also remain on tenterhooks as the RBI is expected to keep its repo rate steady.
• USD/INR has witnessed a steep fall after a breakdown of the inventory distribution.

The USD/INR pair has sensed selling pressure around 82.40 in the Asian session amid a sheer sell-off in the US Dollar Index (DXY). The USD Index fell like a house of cards as a few Federal Reserve (Fed) policymakers delivered dovish commentary for June’s monetary policy. Going forward, the release of the United States Nonfarm Payrolls (NFP) data will remain in the spotlight.

It looks like the Indian Rupee will also remain on tenterhooks as the Reserve Bank of India (RBI) is expected to keep its repo rate steady in its monetary policy meeting scheduled for June 6-8.

A survey from Bloomberg showed that the RBI will keep its repo rate steady at 6.5% throughout the year and will announce a rate cut by 25 basis points (bps) in the first quarter of the next financial year.

USD/INR has witnessed a steep fall after a breakdown of the inventory distribution in which inventory is transferred from institutional investors to retail participants. The inventory adjustment formed in a range of 82.50-82.83 on an hourly scale. The 20-period Exponential Moving Average (EMA) at 82.36 is acting as a barricade for the US Dollar bulls.

The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, indicating more weakness ahead.

USD/INR hourly chart