USD/INR Price Forecast: Remains sideways near 89.00 from a week

• USD/INR has been trading in a limited range for over a week.
• Indian markets are closed on Thursday.
• The RBI kept its Repo Rate steady at 5.5% on Wednesday.

The USD/INR pair ended Wednesday with a 0.2% correction to near 88.83. The pair faced selling pressure on Wednesday after the Reserve Bank of India's (RBI) monetary policy announcement. On Thursday, Indian currency markets are closed on account of Dusshera and Mahatma Gandhi Jayanti.

The RBI held its Repo Rate steady at 5.5%, as expected, and maintained a "neutral guidance" on the monetary policy outlook. The Indian central bank stated that officials decided to hold interest rates in the wake of steady domestic growth, subdued inflation, and heightened global risks.

In the monetary policy announcement, the RBI raised Gross Domestic Product (GDP) growth projection for the current financial year to 6.8% from the prior forecast of 6.5%.

The RBI warned that trade tensions with the United States (US) have raised uncertainty in the export market, but expressed confidence that its impact on economic growth will be offset by announced Goods and Services Tax (GST) rate cuts.

Meanwhile, the US Dollar (USD) has remained under pressure due to the US government shutdown and increasing hopes of more interest rate cuts by the Federal Reserve (Fed) this year.

USD/INR has been trading sideways after posting a fresh all-time high near 89.10 last week. The near-term trend of the pair remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around 88.50.

The 14-day Relative Strength Index (RSI) stays above 60.00, suggesting a strong bullish momentum.

Looking down, the pair could slide to near the September 12 high of 88.57 and the 20-day EMA, if it breaks below the September 25 low of 88.76.

On the upside, the pair could extend its rally towards the round figure of 90.00 if it breaks above the current all-time high of 89.12.

USD/INR daily chart