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USD vs INR: The rupee traded in a narrow range and gained 7 paise to 90.40 against the US dollar in early trade on Thursday. The domestic currency moved marginally higher amid corporate dollar demand, while investors waited for confirmation on the India–US trade deal.

Market participants are shifting focus from celebration to verification. No official documents on the trade deal have been released so far, and neither side has formally published the final terms. This has kept sentiment cautious in the currency market.

Investors are also awaiting cues from Friday’s interest rate announcement by the Reserve Bank of India. The upcoming policy decision has added to near-term uncertainty for the rupee.

Manoj Kumar Jain, director at Prithvi Finmart Commodity Research, said the dollar index shows very high volatility and rebounded again. The dollar index settled on a positive note at 97.53 on Wednesday, with a gain of 0.31 per cent. The USD-INR February 25 futures contract was also settled on a positive note at 90.5775, with a gain of 0.26 per cent on the National Stock Exchange.

He said the dollar index rebounded after the US-Iran nuclear deal talks were called off, as the US did not agree to shift the venue from Istanbul to Oman. The dollar index also gained after the US President’s phone call with the Chinese President.

However, Jain said a partial shutdown in the US and delays in the release of key economic data could limit gains in the dollar index. He expects the dollar index to remain volatile this week amid volatility in global financial markets, the partial shutdown in the US, and geopolitical tensions. The dollar index is expected to trade in the range of 95.85 to 98.55 this week.

On the domestic front, Jain said the rupee is seeing some profit-taking against the US dollar after the biggest single-day gain in eight years on Tuesday. He noted that the final draft of the US-India deal has not been released yet, and the market remains cautious ahead of the final blueprints of the agreement.

He added that crude oil prices surged again after the US-Iran nuclear deal meeting was called off, which could limit gains in the rupee. At the same time, a rebound in domestic equity markets could support the currency.

Jain expects the rupee to remain volatile this week amid volatility in the dollar index, volatility in domestic equity markets, and geopolitical tensions. He expects the USD-INR pair to trade in the range of 89.40 to 93.40 this week.

On the technical front, Jain said the USD-INR February 25 futures contract has recovered from its lows. On the daily technical chart, the pair is trading below its moving average trend-line support level of 91.39, and the RSI is below 50 levels. The MACD is also showing a negative crossover on the daily charts.

As per the daily technical chart, support is placed at 90.22 to 89.85, while resistance is seen at 90.80 to 91.08. The pair is trading below its support level of 91.39 and is expected to trade in the range of 89.40 to 93.40 this week.

Jain suggested buying the pair between 90.60 and 90.35, with a stop loss below 90.00 and a target of 90.80 to 91.05.