Indian Rupee: Stabilisation but recovery hurdles against US Dollar – OCBC

OCBC strategists Christopher Wong and Sim Moh Siong observe that the Indian Rupee (INR) faced depreciation pressure as Oil and geopolitics resurfaced, pushing USD/INR towards a one‑month high. He notes that some pressure has eased with Oil off its highs and RBI-linked Dollar sales helping limit losses. Near term, USD/INR should stay relatively contained, though a clean recovery likely needs lower Oil prices.

USD/INR pressure easing with flows and RBI support

"INR came under depreciation pressure as oil/geopolitics moved back into focus. Higher crude prices can pose downside pressure for INR, and USD/INR’s move towards one-month high yesterday suggests that market is again testing INR’s oil sensitivity."

"That said, some of the pressure has eased with oil prices back off highs and the INR is not without support. RBI-linked USD sales appear to have helped limit recent losses, while the flow backdrop has improved at the margin following RBI’s June measures to attract FX inflows via FCNR(B) deposits, external borrowings and wider foreign access to long-end government bonds. "

"Month-to-date foreign net equity and debt inflows also look to have improved marginally. Near term, INR should stay relatively contained, but the bar for a clean recovery is still high unless oil prices resume its move lower."

"USD/INR was last seen at 95.40 levels. Momentum is mild bullish while RSI shows tentative signs of moderation from the recent rise."

"Resistance at 95.55 (50% fibo retracement of 2026 high to June low), 95.90 (61.8% fibo). Support at 95.20 (50 DMA, 38.2% fibo), 94.80/90 levels (21 DMA, 23.6% fibo)."