## USD/INR Holds Above 90 as Rupee Faces Renewed Import Demand Despite RBI Support

The USD/INR pair hovers near the 90.20 mark on Thursday morning, as the Indian Rupee continues to struggle against the greenback following aggressive Reserve Bank of India intervention just a day earlier. Despite the RBI's coordinated selling of US Dollars on Wednesday—the first substantial FX intervention of the year to curb one-way excessive movements—the currency pair has managed to maintain elevated levels. Market participants attribute this resilience primarily to strong demand from Indian importers, who viewed the brief rupee recovery as an attractive entry point to establish fresh positions.

The persistent dollar demand reflects underlying trade tensions between India and the United States that have intensified significantly since mid-2025. When Washington implemented 50% tariffs on New Delhi's oil imports from Russia, it sparked a broader economic friction. More recently, US President Donald Trump has threatened additional tariff escalation, further pressuring Indian assets. This geopolitical backdrop has proven particularly detrimental to foreign investor confidence in Indian equities, with Foreign Institutional Investors (FIIs) registering net outflows in eight of the twelve months throughout 2025, and selling securities valued at Rs. 4,650.39 crore so far in January.

### Greenback Strength Driven by Resilient US Services Data

The upward momentum in USD/INR gains additional support from renewed strength in the US Dollar Index (DXY), which trades near 98.70 following Wednesday's surprisingly robust US ISM Services Purchasing Managers' Index (PMI) release. The Services PMI accelerated to 54.4 from November's 52.6, substantially outpacing economist expectations of 52.3. This acceleration indicates the American services sector concluded 2025 with notable momentum, while sub-components including the Employment Index and New Orders Index similarly exceeded forecasts.

However, broader labor market indicators present a more tempered picture. The ADP Employment Change registered only 41,000 private sector jobs added in December against estimates of 47,000, while the JOLTS Job Openings declined to 7.15 million in November compared with projections of 7.6 million. These softer readings suggest moderating labor demand, potentially supporting market expectations for Federal Reserve interest rate reductions in upcoming policy meetings.

Market participants will closely monitor Friday's Nonfarm Payrolls (NFP) report for December, with consensus pointing to 60,000 new positions added compared to November's 64,000, while the Unemployment Rate is forecast to tick down to 4.5% from 4.6%.

### Technical Picture: 20-Day EMA Emerges as Critical Resistance

From a technical standpoint, USD/INR faces a crucial inflection point at the 20-day Exponential Moving Average (EMA), currently positioned at 90.2025. The pair sits marginally below this key level, which has begun to flatten and roll over, suggesting diminishing upside momentum. The 14-day Relative Strength Index (RSI) registers at 49, reflecting neutral conditions without a decisive directional bias.

A successful daily close above the 20-day EMA would reignite bullish momentum and potentially pave the way toward the currency pair's all-time high of 91.55. Conversely, failure to breach this resistance could trigger deeper mean reversion, with the December 19 low of 89.50 emerging as the next significant support level to monitor.