• USD/INR extends pullback from a two-month-old horizontal resistance.
• Bearish RSI divergence adds strength to the pullback moves.
• Two-week-old support line, 200-SMA challenge sellers, 75.40 adds to the upside filters.

USD/INR stays on the back foot around 74.94, down 0.10% intraday while extending the previous day’s losses from November’s top.

That said, bearish RSI divergence and the pair’s inability to cross a horizontal area established from early October favor Indian rupee buyers (INR) heading into the European session.

It’s worth noting that the latest weakness eyes an ascending support line from November 18, close to 74.75, but any further declines will be challenged by lows marked during October and 200-SMA, respectively around 74.70 and 74.60. Adding to the downside filters is the early November’s peak near 74.55.

Alternatively, a clear upside break of the stated resistance zone near 75.15-20 won’t be enough for the bulls to return as the October 18 peak of 75.37 will join bearish MACD signals to test the recovery moves.

Following that, the yearly peak near 75.65, marked in October, will be in focus.

USD/INR: Four-hour chart

Trend: Pullback expected