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The US Dollar continues its pullback from the $86.00 mark for a fourth consecutive session.
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Muted market response to the US-China trade agreement and investor caution ahead of the US CPI release are bolstering the Indian Rupee.
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USD/INR nears a critical support zone between 85.25 and 85.35.
The Indian Rupee continues to strengthen for the fifth consecutive session on Wednesday, with USD/INR edging lower toward the key support zone of 85.25–85.35. The initial boost to the US Dollar from the recent US-China trade agreement has faded quickly, prompting a renewed downward move in the pair ahead of the highly anticipated US Consumer Price Index (CPI) data release.
The US and China have agreed on a framework aimed at easing trade tensions, aligning with the Geneva consensus—focused on reducing export restrictions on rare earth elements and lowering tariffs. However, the agreement’s lack of detailed commitments has led to a cautious and somewhat skeptical reaction from the market.
Although the US Dollar briefly strengthened following the announcement, it reversed course later in the US session as traders grew cautious ahead of the US CPI report and a critical auction of US Treasury bonds scheduled for later today.
Technical Outlook: USD/INR Maintains Bearish Tone Near Key Support
USD/INR remains under pressure after retreating from the recent high near 86.00. The pair is approaching a crucial support region at 85.25–85.35, which coincides with the lows posted on May 28, May 30, and June 2, as well as the ascending trendline from the early May low. A breakdown below this zone could open the door for a further decline toward 84.77—lows from May 26–27—and potentially the May 12 bottom at 84.25.
Despite moving within an ascending triangle—typically a bullish pattern—momentum indicators suggest bearish pressure. To regain bullish control, USD/INR would need a confirmed breakout above the 86.00 resistance, which could then pave the way for a retest of the April 9 high at 86.90.
