• USD/INR has recovered the majority of Thursday’s losses amid anxiety over the US NFP release.
• Lower ADP Employment Change has trimmed the forecasts of US NFP.
• The RBI is expected to remain aggressive on the repo rate.

The USD/INR pair has displayed a responsive buying action after hitting a low of 77.36. The asset has found buyers on expectations of a rebound in the US dollar index (DXY). After an intense sell-off, the DXY is eyeing a pullback, which would underpin the negative market sentiment for a very short interval.

It is worth noting that the major has registered a fresh all-life-time high at 77.89 in May. The asset is experiencing a minor correction and will resume its upside journey as oscillators will turn extremely oversold on a lower timeframe soon.

In today’s session, the release of the US Nonfarm Payroll (NFP) will hog the limelight. The US economy may have generated additional employment opportunities of 225k, as per Reuters, in May against the prior print of 428k. The downbeat release of the Automatic Data Processing (ADP) Employment Change at 128k has trimmed the forecast of the NFPs.

The DXY displayed a vulnerable performance on Thursday and a similar kind of performance could be delivered today if the US NFP drops significantly.

On the oil front, the black gold is experiencing a time correction after a juggernaut rally from $111.20. Mounting supply concerns are pushing the oil prices higher. Prohibition of oil from Russia by Europe and withdrawal of membership from OPEC+ by Russia have elevated the supply worries in an already tight market.

Next week, the monetary policy announcement by the Reserve Bank of India (RBI) will be an important event. Considering the inflationary pressures, the RBI is expected to dictate a hawkish stance on the interest rates.