Higher commodity prices to keep the rupee under pressure

Today, Indian rupee opened near the close of 76.43 made on March 22, 2022, and is likely to remain under pressure amid higher commodity prices. Read on to find out more. 

Amid the risk-averse sentiments and the surge in the crude oil prices overnight, the Indian rupee opened lower on Thursday. On Wednesday, the USD/INR pair gained for the third day in a row to settle at 76.43 with 50 paise or 0.66% up from the previous close.

As against the developed market peers, the US dollar was mixed, while on the consecutive fall on the fourth day, the yen made its six-year low. As Chancellor Rishi Sunak announced a tax cut and reports suggesting higher than expected inflation, the pound tumbled. Amid the geopolitical worries and the hawkish tone of the US Fed, the dollar index (basket of six currencies) is likely to trade around 99.

The reports indicated a fall in the US crude oil inventories and also the crucial Black Sea damage by the storm increased the supply risk. Moreover, as the US gets ready to levy more sanctions on Russia, the West Texas Intermediate (WTI) crude oil surged to trade at USD 116 a barrel.

The March futures of USD/INR pair witnessing buyers near its psychological level of 76. The pair has been taking short-term support on its 21-Day Moving Average (DMA) and in the medium-term too it is taking very good support on its 50-Day Exponential Moving Average (EMA).

Moreover, since the lows made in January 2022, it is sticking to its bullish tone as it continues to make a series of higher highs and higher lows. Looking at indicators, the Relative Strength Index is trading around 50 level signifying consolidation in near-term.

Speaking about its important levels, the support and resistance for the pair in the near term is placed at 75.54 to 75.82 and 76.33 to 76.46, respectively.