• USD/INR takes the bids to renew intraday high amid broad US dollar rebound.
• Firmer oil prices, strong yields drown INR ahead of India’s Jan-March GDP.
• Easing bets on Fed’s aggressive rate hikes, cautious mood ahead of Biden-Powell meet probe USD rebound.

USD/INR remains on the front foot around 77.65, refreshing intraday high, as firmer USD and oil prices weigh on Indian Rupee (INR) pair during Tuesday’s Asian session. It’s worth noting that the cautious sentiment ahead of the January-March India GDP and a meeting between US President Joe Biden and Fed Chair Jerome Powell also propel the quote of late.

The US Dollar Index (DXY) bounces off the monthly low to regain the 101.50 level, up 0.23% intraday at the latest, amid mixed sentiment and firmer US Treasury yields.

Although easing of the virus-led lockdowns joins receding bets on the Fed’s aggressive rate hikes to favor the US stock futures, as well as Asia-Pacific equities, geopolitical headlines join firmer yields to challenge optimists. That said, the Eurogroup agrees on fresh sanctions on Russia while Ukrainian President Volodymyr Zelensky said the situation remained ‘extremely difficult’ in the Donbas region, per Reuters.

Elsewhere, comments from Fed Board of Governors member Christopher Waller also seem to underpin the US Treasury yields and the greenback’s recent upside. The policymaker said that he supports lifting interest rates by another 50 bps at the next several Fed meetings and that the policy rate should be above neutral by the end of the year to reduce demand, reported Reuters.

It should be observed that a two-month high in oil prices, around $116.50 by the press time, also weighs on INR due to India’s record deficit and heavy reliance on energy imports.

Looking forward, India’s January-March GDP, expected 4.0% YoY versus 5.4% prior, appears an immediate catalyst for the USD/INR pair traders to watch. Following that, Chicago Purchasing Managers’ Index and Dallas Fed Manufacturing Business Index for May will decorate the daily calendar. Above all, the Biden-Powell talks and geopolitical headlines from the Eurogroup meeting will be crucial for the quote.

Technical analysis

Higher-low formation joins bullish RSI divergence to keep USD/INR buyers hopeful of breaking the immediate trading range between 77.30 and 77.80 to the upside.