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The Indian Rupee (INR) slid near an all-time low against the US Dollar (USD) as the persistent demand for the Greenback, weakening Chinese Yuan, and concerns over global economic developments weighed on the local currency. Key economic data, including India's PMI figures, showed signs of moderation, further pressuring the INR. Despite RBI's potential intervention to stabilize the currency, a bullish outlook for USD/INR prevails, with technical indicators suggesting possible consolidation. Global developments, including the Fed's policy outlook and US PMI data, remain critical factors influencing the pair's direction. Traders are closely watching resistance levels near 85.81 and support at 85.55 for further cues.

Key Highlights

* Indian Rupee weakens, nearing a record low against the US Dollar.

* Persistent USD demand and weaker Chinese Yuan weigh on the INR.

* India's Services PMI dropped to 59.3 in December, below expectations.

* RBI intervention expected to stabilize the INR amid depreciation risks.

* USD/INR faces key resistance at 85.81 and support at 85.55.

The Indian Rupee (INR) continued its downward trajectory, nearing a fresh all-time low against the US Dollar (USD) during Monday's trading session. Persistent demand for the Greenback, coupled with a weakening Chinese Yuan and global uncertainties, exerted pressure on the local currency. Concerns over future US Federal Reserve rate decisions and trade policies under the incoming administration added to the INR's challenges.

India’s Services PMI for December eased to 59.3 from the preliminary estimate of 60.8, missing market expectations of 60.5. The disappointing economic data amplified the INR’s weakness, further fueled by foreign portfolio investment volatility and global headwinds.

Technically, the USD/INR pair remains bullish after breaking above an ascending trend channel and staying well-supported above the 100-day EMA. However, an overbought RSI hints at potential consolidation before the next move. Traders are eyeing the resistance level of 85.81, which, if breached, could propel the pair to the psychological mark of 86.00. On the downside, support levels at 85.55 and 85.00 provide critical cushions.

Global factors, including US PMI data and Fed officials' statements, will play a pivotal role in shaping the pair's outlook. The RBI is likely to intervene to curb excessive volatility, ensuring some stability for the INR in the short term.

Finally

USD/INR remains bullish, with resistance at 85.81 and support at 85.55. Consolidation may occur, but global factors will dictate near-term trends.

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