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The Indian Rupee stabilized near mid-83.00s during the Asian session on Tuesday, benefiting from subdued USD demand. Expectations of a dovish Federal Reserve, following a major rate cut last week, have kept the USD under pressure, providing some relief to the INR. Technically, the USD/INR pair remains vulnerable, trading below its 100-day EMA, with key support at 83.30 and resistance around 83.68. Additionally, India’s PMI data for September showed a slowdown in manufacturing and services activity, further influencing market sentiment. Investors now await key US PCE data and FOMC member speeches, which could provide additional cues for the USD/INR pair's future direction.

Key Highlights

* Indian Rupee stabilizes near mid-83.00s after modest dip-buying during the Asian session.

* Dovish Federal Reserve expectations keep USD under pressure, aiding INR strength.

* US PCE Price Index and FOMC member speeches could impact USD/INR outlook.

* Indian manufacturing PMI eases, reflecting slower economic growth in September.

* USD/INR remains vulnerable as it trades below key technical levels, signaling potential downside.

The Indian Rupee (INR) witnessed a mild recovery during the Asian session on Tuesday, stabilizing around the mid-83.00s level after the previous day's pullback. This move came as traders bought into the currency following its recent decline, driven by subdued demand for the US Dollar (USD). The INR's strength is being bolstered by expectations of a more dovish Federal Reserve stance, with investors anticipating further rate cuts in the near future, especially after last week’s substantial rate reduction. The USD’s inability to gain momentum from recent lows has provided the INR with some respite.

From a technical perspective, the USD/INR pair remains under pressure, as it continues to trade below its 100-day Exponential Moving Average (EMA), indicating potential for further downside movement. The 14-day Relative Strength Index (RSI) also sits in bearish territory, reinforcing this view. Initial support is seen at 83.30, with the next significant support at 83.00. On the upside, resistance emerges around 83.68, the 100-day EMA, and 84.00, which could cap any potential rallies.

Other news impacting market sentiment includes a decline in India’s PMI data for September. The HSBC India Manufacturing PMI eased to 56.7 from 57.5, while the Services PMI fell to 58.9, reflecting slower economic activity. Meanwhile, the US PMI readings also showed weaker-than-expected results, contributing to the USD’s softer tone. With key US PCE data and FOMC speeches on the horizon, market participants will be closely monitoring these events for further direction on USD/INR.

Finally

The Indian Rupee could gain further ground if the USD continues to weaken. A break below 83.30 would confirm downside bias, while resistance at 83.68 remains key.

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