• The USD/INR is negotiated about 86.42, touching its highest level since April in the midst of persistent geopolitical tensions.
• The conflict in climbing between Iran and Israel and the call to the evacuation of Trump raise the demand for safe refuge, pressing the currencies of emerging markets.
• The firm WTI crude and the weak Indian actions generate concerns about broader outputs of FII, adding pressure to the rupee.
• Operators are attentive to US retail sales and the FED decision in search of new clues about the direction of the US dollar.

The Indian rupee (INR) weakens against the US dollar (USD) on Tuesday, giving the modest rebound on Monday, since geopolitical tensions in the Middle East, the highest prices of crude oil and a strong dollar affect the feeling before the key decision on the interest rate of the Federal Reserve (Fed).

The USD/INR torque rose to an intradic maximum of 86.46 – a level not seen since April 11 – and about 86.42 was negotiated at the time of writing, an increase of almost 0.38% in the day. However, the US dollar weakened slightly after US retail sales did not meet market expectations, which attenuated the buying interest in the dollar.

The tensions between Iran and Israel intensified even more on Tuesday after Israel allegedly murdered the Chief of War Personnel of Iran, Ali Shadmani – the second high -ranking commander killed in days. In response, Iran launched a new wave of missile attacks and drones aimed at Tel Aviv and Herzliya, activating air alert sirens and chaos in Tehran. Adding to the feeling of urgency, former US president Donald Trump requested an immediate civil evacuation of Tehran and insisted that he wants a “real end” to the conflict instead of a high temporal fire. The high geopolitical risk has fed risk aversion flows in global markets.

Market movements: Risk aversion flows, stable US dollar and FII outputs press

• The rupee has fallen to its weakest level in more than two months, reflecting a constant downward trend so far this month. About 0.77% in June has depreciated, expanding its accumulated fall in the year to approximately 0.73% as the persistent strength of oil and the nerves of the global market continue to weigh on the currency.
• According to Jateen Trivedi, vice president and investigation analyst for raw materials and currencies in LKP Securities, Rupia remains vulnerable in the midst of the conflict in climbing in the Middle East. “The weakness in capital markets indicates possible FII outings, adding pressure to the rupee,” He pointed out in a report published by Business Standard.
• The actions of shares reflected the cautious mood. The generalized sale dragged the BSE Sensex down in 212.85 points to close at 81,583.30, while the NSE NIFTY lost 93.10 points to close at 24,853.40. Foreign institutional investors (FII) were net sellers on Monday, withdrawing shares for a value of ₹ 2,539.42 Crore, according to bag data.
• In raw materials, the West Texas Intermediate (WTI) crude from the US rose approximately 2.22% to around $ 71,69 per barrel on Tuesday, backed by concerns about possible supply interruptions in the middle of the Iran-Israel confrontation. The highest prices of oil usually increase the import invoice of India, exerting additional pressure on the rupee and the balance of the current account.
• Meanwhile, the US dollar index (DXY), which tracks the dollar against a basket of six main currencies, remains firm above the 98.00 mark after falling to 97.68 on Monday due to weaker factory data than expected. The New York state manufacturing index collapsed to -16.0 in June, from -9.2 in May, being well below market forecasts and indicating a deeper contraction in regional manufacturing activity.
• The market approach focused on the new US retail sales data for May, which showed a more pronounced fall than expected of 0.9% intermensual – the greatest drop in four months – after a decrease of 0.1% in April. The figure was weaker than the market forecast of a 0.7%drop, suggesting that consumers reduced their expense against early tariffs. Meanwhile, the Fed is expected to maintain the rates without changes in its policy meeting on Wednesday, with updated projections and the comments of President Jerome Powell probably attracting attention by any indication of the perspectives.

Technical Perspective: The rupture points to 87.00 as the impulse accumulates

In the Technical Front, the USD/INR has exceeded a symmetrical triangle formation in the 4 -hour graph, which suggests a continuation of the recent bullish impulse. The pair remains well above the EMA of 21 periods about 86.07, supporting the positive positive trend. The impulse indicators remain encouraging, with the RSI around 66 – below the overcompra territory – and the MACD histogram and the signal lines accumulating more upward traction. A sustained trade above the area of ​​86.20–86.30 could clear the way for a movement towards the psychological zone of 87.00.