• Indian rupee is recovered after two days of losses, following an index of the weakest US dollar.
• New commercial data and the decrease in wholesale inflation support the feeling of the INR.
• Nifty 50 and Sensex reference indices of India bounce hard.
• The expectations of intervention of the RBI anchor the rupee despite the hostilities in the Middle East..

Indian rupee (INR) is strengthened against the US dollar (USD) on Monday, stopping a two -day loss streak while the US dollar index (DXY) falls and new commercial data improves feeling. A closer commercial deficit has offered some support to the rupee, helping her to recover with a softer dollar and a stable risk appetite in global markets.

The USD/INR torque extends its intradic decline to quote around 86.07 before the American session, falling almost 0.25% from the maximum of the day of 86.36. A weakest dollar, better internal commercial data and prices of global crude oil softer after Friday’s rebound are providing support to the rupee, although the operators remain cautious about the important economic launches of the United States this week.

Although the conflict in Iran and Israel has so far had a limited direct impact in India, those responsible for politics remain vigilant to any possible impact, given the importance of the region for Indian energy security. Nueva Delhi has maintained a neutral diplomatic posture, urging the descale while actively monitoring supply routes to guarantee adequate crude reserves.

This measured approach, together with the arrangement of the Bank of the Reserve of India (RBI) to stop the excessive volatility of the currency, has helped cushion the rupe of more acute oscillations, although a sudden outbreak could still push the prices of rising oil and rekindle the inflationary pressure.

Market movements: The rupee is stabilized with the data; Fed and tensions in the Middle East keep operators alert

• India’s commercial deficit stood at 21.88 billion dollars in May 2025, little changed compared to 23.8 billion a year ago, highlighting stable commercial flows compared to the fluctuations observed in other Asian economies. Imports fell 1.7% to 60.61 billion dollars, helped by softer energy prices, while exports fell 2.2% to 38.73 billion dollars. Notably, shipments to the United States increased to 17.25 billion dollars since April, compared to 14.17 billion a year ago, which suggests that recent US tariff movements have had a limited impact on India’s trade.
• India wholesale inflation cooled at 0.39% in May 2025, marking its lowest level since March 2024 and being below the market expectations of a slight decrease to 0.80%. Soft food prices, especially a sharp drop in vegetable costs, helped relieve general inflation. The growth of prices in manufacturing also slowed, reflecting more moderate cost increases for articles such as paper, food and plastic products. Meanwhile, fuel and energy prices continued to fall, led by lower gas and diesel rates. In monthly terms, wholesale prices slightly fell 0.06%, extending the modest April decrease.
• The Bank of the India Reserve has indicated its willingness to soften the excessive volatility of the rupee through interventions if necessary. This support continues to support the currency, even when the operators keep an eye on global risk trends.
• India’s reference rates also bounced on Monday, breaking a two -day loss streak. The NSE NIFTY 50 rose 227.90 points, or 0.92%, to close at 24,946.50, while the BSE Sensex added 677.55 points, or 0.84%, ending at 81,796.15.
• The safe refuge flows supported the US dollar as tensions between Israel and Iran intensified, increasing concerns about possible interruptions in oil shipments through the Ormuz Strait. Although crude oil prices rose due to geopolitical concerns, the short -term strength of the US dollar was balanced with uncertainty about US commercial policy and the next central banks meetings.
• The May Consumer Price Index showed a modest increase of an intermennsual 0.1% and an increase of 2.4% year -on -year, a slightly softer result than the forecasts and that reflects an underlying price pressure contained despite the tariffs. This reading reinforced the expectations that the Federal Reserve (FED) would maintain its policy rate at the June meeting instead of moving immediately towards relief.
• The operators are returning their attention to the mid -week meeting of the Fed, where it is widely expected that those responsible for the policy maintain the stable rates. Market participants will analyze the updated economic projections and comments of the president of the FED, Powell, in search of clues about when the rate cuts could begin.

Technical Analysis: USD/INR Try the rupture of the triangle, but the impulse fades

The USD/INR torque has recently broken a symmetrical triangle pattern of several weeks in the 4 -hour graph, pointing out a possible change in short -term bias. However, after reaching about 86.50, prices are struggling to keep the impulse above the higher trend line. The torque is currently about 86.07, modestly above the exponential (EMA) mobile average of 21 periods at 85.97, which suggests that buyers still have a slight advantage while prices are maintained above this medium mobile support.

The relative force index (RSI) of 14 periods is around 59, indicating a mild bullish impulse but not yet in overcompra territory. A sustained movement above the recent maximum about 86.50 could confirm a stronger bullish breakdown, potentially exposing the psychological level of 87.00. On the other hand, a fall below the EMA and a new test of the old resistance of the triangle turned into support about 85.90–85.80 could attract new sales, dragging the torque towards the lower ascending line of upward trend about 85.50.