Indian rupee weakens in the midst of tensions in the Middle East, increased crude oil price

• Indian rupee extends its loss streak for the third consecutive day, reaching the weakest level since mid -March against the US dollar.
• The Israel-Iran conflict enters its seventh day, USA is allegedly prepared for a possible military attack.
• Brent and WTI oil prices have risen more than 20% this month, supply fears maintain high prices.

The Indian rupee (INR) extends its loss streak for the third consecutive day against the US dollar (USD) on Wednesday, sliding to a minimum of three months while the conflict in the Middle East in climbing feeds new concerns about the supply and keeps raw prices of crude oil. The highest oil costs continue to press the import invoice of India, adding persistent pressure on the rupee.

The USD/INR torque is listed up around ₹ 86.71, slightly below its intradic peak of ₹ 86.89 seen during European negotiation hours. Meanwhile, the American dollar index (DXY), which tracks the value of the green ticket compared to six main currencies, remains stable about 98.95 after the Federal Reserve (Fed) maintained interest rates without changes on Wednesday, reinforcing the general resilience of the US dollar in the middle of an already uncertain global panorama. Negotiation volumes remain low since US financial markets remain closed on Thursday by the Juneteenth holiday, limiting the price action until liquidity returns on Friday.

As the Iran-Israel conflict enters its seventh day, both nations have continued with strong attacks: Israel pointing to Iran’s nuclear and military facilities, and will respond with waves of ballistic missiles and drones towards the Israeli territory, including civil hospitals. USA has reinforced its regional posture deploying naval ships and additional air assets to serve as dissuasive amid the growing tensions. The US president, Donald Trump, has publicly supported Israel’s campaign, praising his attacks as “excellent” and warning Iran of an “even more brutal” action if he does not yield in his nuclear ambitions. Trump remains not compromised about the direct military participation of the US, saying: “You may do it. I may not do it. I mean, nobody knows what I am going to do.”

Market movements: INR at a minimum of three months, oil is triggered by supply fears, the Fed maintains rates

• Indian rupee falls to its lowest level since mid-March against the US dollar on Thursday, since greater risk aversion takes over financial markets, with operators preparing for the possibility of a direct participation of the US in the Israel-Iran conflict.
• Recent reports intensified the nerves of the market late on Wednesday, with The Wall Street Journal revealing that US President Donald Trump had given private approval for possible military action against Iran, but paused the final directive to evaluate Tehran’s willingness to stop his nuclear efforts. In parallel, Bloomberg He informed that US defense officials are actively preparing a possible attack on Iranian objectives in the short term. This growing threat of a broader conflict has promoted crude oil prices.
• The lawyer, politician and activist Prakash Ambedkar declared that every time oil prices rise, Indian refiners are forced to buy more US dollars to cover their imports, thus increasing the demand for dollars and weakening the rupee, which in turn increases fuel even more in terms of local currency. He stated that this repeated cycle can expand the current account deficit and press the country’s finances. Ambedkar also warned that the Israel-Iran conflict will probably have impact on prices and supply chains in sectors closely linked to crude oil. To relieve the load, Ambedkar urged the Government to temporarily limit fuel prices by adjusting special taxes or offering specific subsidies, and asked the Indian Reserve Bank (RBI) to intervene in the foreign exchange market to limit the excessive volatility of the rupee.
• The Iran-Israel conflict has promoted a strong rebound in oil prices, with Brent oil futures quoting about $ 76 per barrel, marking a gain of more than 20% until now this month. The West Texas Intermediate (WTI) remains around $ 74 at the time of writing, rising approximately 22% so far this month. The escalation of hostilities and the fears of a possible participation of the US have fueled new concerns about the supply, maintaining both well -demanded indices despite the moderate festive trade in the US.
• Petroleum represents a significant part of total imports of India, and economists estimate that each increase of $ 10 per barrel in crude oil prices can expand the current account deficit of the country up to 0.4% of GDP.
• The Fed maintained its reference interest rate without changes in the 4.25% –4.50% range on Wednesday, maintaining a cautious approach while officials balance moderate economic growth with persistent inflation risks. Those responsible for the monetary policy hinted at the possibility of two rates cuts before the end of the year, but emphasized that any adjustment would depend on how inflation and broader economic data evolve in the coming months.
• The president of the FED, Jerome Powell, emphasized the caution on Wednesday, warning that the economic projections of the Fed are far from infallible. Powell urged markets not to depend excessively on the “points graph”, noting that all future decisions on rates will remain dependent on the data. He framed the message as “nobody holds these rates roads with a great degree of conviction,” underlining the adaptive position of the Central Bank.

USD/INR technical perspective: Strong triangle rupture drives the bullish impulse

The USD/INR torque has registered a strong rupture of a symmetrical triangle pattern of several months in the daily chart, printing consecutive bullish candles that indicate a renewed ascending impulse. The price action remains comfortably above the rupture zone, with the 50 -day exponential (EMA) mobile average about 85.65 now acting as dynamic support if any benefits arises.

The relative force index (RSI) is maintained around 66, indicating a healthy bullish impulse with space to test overcompra levels before any setback. If the torque maintains this upward structure, a clear thrust above the round number of 87.00 could pave the road to the next resistance in 87.50–88.00. Downwards, falls around 86.00–86.20 can attract new buying interest, keeping intact the broader upward trend.