New Delhi [India], May 5 (ANI): The sentiment for the Indian Rupee (INR) has turned more favourable in recent weeks, according to a report by Union Bank of India.
The report noted that despite ongoing global uncertainties and volatility, the Dollar Index (DXY) is expected to cool down and consolidate at current levels.
It said, "We still claim buy on dips for USDINR but we believe that the sentiment for INR has turned more favourable in recent weeks......... probably a breach of current technical level and any news related to the probable escalation in the border will hurt Rupee sentiment."
The report also highlighted that in the foreign exchange market, the Dollar-Rupee (USD/INR) pair has shown adherence to previous technical levels. On April 30, 2025, the pair took support at 84.45.
However, the next day, this support level was breached as the USD/INR fell below the 84 mark, touching 83.7575. This decline was driven by the triggering of major stop losses.
The fall in the USD/INR pair prompted significant buying activity from importers and oil companies, who rushed to purchase dollars at the lower levels. As a result, the USD/INR rebounded and closed at 84.5725 the following day.
Looking at the technical levels, the report suggests that the Indian rupee may consolidate at the current levels, taking support at 84.40.
The report said, "We feel INR consolidation at current levels taking support of 84.40, a break of which will open doors to 83.85 levels."
On the upside, the pair is expected to face resistance near 84.90, and a breach of this level could open the path to 85.60.
The bank also highlighted the importance of monitoring the Dollar Index (DXY) for any possible overshoot, particularly if current technical levels are breached. Additionally, any news related to probable escalation at the border may hurt the Rupee sentiment.
Despite these potential risks, the report maintains a "buy on dips" stance for USD/INR. However, it also acknowledges that the recent improvement in sentiment for the Rupee could influence future movements positively. (ANI)