Key bullet points for the USDINR
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India’s fundamentals remain a drag on the rupee, with flash PMIs falling to the lowest since February, muted inflation opening the door to further RBI cuts, and US-India trade talks lacking a near-term breakthrough.
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With USDINR at record highs, Fibonacci extensions are guiding upside targets, with key levels at 87.97 (100%), 89.12 (127.2%), and 90.57 (161.8%), the latter now broken and acting as a pivotal level.
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Price failed to sustain a break above the topside channel trendline near 90.96, signaling potential for a corrective pullback, but sellers must reclaim 90.5735 to confirm downside momentum.
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As long as price holds above 90.5735, buyers remain in control, keeping USDINR in open territory with the next major upside target at 92.18 (200% Fibonacci extension).
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The US dollar has weakened against most major currencies since last week’s FOMC decision, despite the Fed delivering the expected 25 bp rate cut and signaling a higher bar for additional easing. Markets focused more on Chair Powell’s dovish tone, as he downplayed inflation risks and highlighted labour-market weakness, suggesting a greater tolerance for inflation than for a deterioration in employment.
In contrast, the Indian rupee continues to slide to record lows versus the dollar, even amid broad USD weakness, as structural headwinds keep USDINR in a bullish trend. From a risk-management standpoint, the bias remains toward buying dips rather than calling a top. US-India trade talks have been constructive but lack a major breakthrough, with expectations now centered on a deal by April 2026. Meanwhile, India’s flash PMI data fell to the lowest level since February, pointing to softer growth, while muted price pressures leave the door open for further RBI rate cuts, factors that continue to weigh on the rupee
Why Fibonacci extensions matter here
With USDINR trading at new all-time highs, there is no historical price action above current levels to reference for upside targets. In these situations, traders often turn to Fibonacci extensions to help project potential resistance and target zones and build a technical roadmap in the direction of the prevailing trend.
Key Fibonacci extension targets
Using the corrective move from February to May as the measured range, the following upside targets were projected:
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100% extension: 87.972
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127.2% extension: 89.117
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161.8% extension: 90.573
The 161.8% extension at 90.573 was briefly broken on Friday and then more convincingly breached during yesterday’s trade, confirming continued upside momentum at the time.
Current price action and trendline resistance
Price has continued to push higher today, with USDINR trading near 90.9050, up 0.17%, after reaching a session high of 91.0775. That high extended above a topside channel trendline drawn off the April, June, July, and August highs on the daily chart, which currently cuts across near 90.960.
However, the break above that channel trendline has not been sustained, with price now trading back below that level. This failure may give buyers some cause for pause and opens the door for a corrective move lower.
Risk levels: what confirms sellers or keeps buyers in control
If sellers are to gain traction, a move back below the broken 161.8% Fibonacci extension at 90.5735 would be a confirming signal, potentially leading to deeper downside correction. That level now acts as a key risk-defining line for the bullish bias.
Conversely, failure to move back below 90.5735 would suggest sellers are not winning the battle, keeping buyers firmly in control and price in open territory.
Next upside target if momentum resumes
If the upside trend reasserts itself, the next major target comes in at 92.1815, corresponding to the 200% Fibonacci extension from the May corrective low.
Watch the video analysis
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving USDCAD in real time, outlining the bias, the risk-defining levels, and the next upside and downside targets that matter most.
Be aware. Be prepared.
This article was written by Greg Michalowski at investinglive.com.