• USD/INR remains confined in a narrow trading band around the 82.00 mark on Tuesday.
• Acceptance below the 200-day SMA supports prospects for some meaningful decline.
• Some follow-through selling below the monthly low will reaffirm the negative outlook.

The USD/INR pair edges lower for the second successive day on Tuesday, albeit lacks follow-through selling and remains confined in a familiar multi-day-old trading range. Spot prices currently trade around the 82.00 round figure, with bears now awaiting a sustained breakdown through upward-sloping trend-line support extending from November 2022.

Against the backdrop of the recent repeated failures ahead of the 83.00 mark, acceptance back below a technically significant 200-day Simple Moving Average could be seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart have again started drifting in the negative territory and suggest that the path of least resistance for the USD/INR pair is to the downside.

That said, it will still be prudent to wait for some follow-through selling below the monthly low, around the 81.75 region, before traders start positioning for any further depreciating move. The USD/INR pair might then accelerate the slide towards the next relevant support near the 81.50 zone before eventually dropping to test sub-81.00 levels or the YTD low touched in January.

On the flip side, the 82.20 area (200-day SMA) now seems to act as an immediate resistance. A sustained strength beyond will reinforce the ascending trend-line support and the subsequent move up has the potential to lift the USD/INR pair beyond the 82.70-82.75 intermediate hurdle. Bullish traders might then make a fresh attempt to conquer the 83.00 round-figure mark.

The said handle has been acting as a strong barrier since October 2022, which if cleared will mark a fresh bullish breakout and set the stage for an extension of the USD/INR pair's well-established uptrend witnessed since August 2022. Spot prices might then surpass the all-time peak, around the 83.40-83.45 region touched in October 2023, and aim to reclaim the 84.00 mark.

USD/INR daily chart

Key levels to watch