USD/INR Forecast: Drops Against Indian Rupee Ahead of FOMC – 17 September 2025

-- The US dollar initially tried to rally during the trading session on Tuesday but gave back gains rather rapidly as we have seen US dollar selling across the board.
-- That being said, we are approaching support, and it will be interesting to see how the market reacts to the 88 Rupee level.
-- Furthermore, we have to be a bit careful at this point, as the FOMC meeting will obviously cause a lot of volatility out there, and therefore you need to be cognizant of the fact that we could get a sudden shift in sentiment that could send this pair flying in either direction.

Technical Analysis

The technical analysis for this pair is somewhat range bound at the moment, but from a longer-term perspective, we have been very bullish. There are a lot of questions right now about the trend, but I think until we get through the FOMC Meeting announcement late on Wednesday, it’s difficult to get aggressive with your position size. Any pullback at this point in time will more likely than not find buyers underneath willing to get involved, as if the United States continues its tariffs against India, is most certainly going to cause more problems for India that it is the United States. Simply put, the United States does not do that much business with India that would impact its domestic economy.

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That being said, there are a lot of questions about whether or not the Federal Reserve is going to start an aggressive rate cutting cycle. The catch here of course is that if they start cutting wildly, it means that they see something very ugly down the road, and that could very well have people running to safety, which ironically would be buying the US dollar itself. Remember, India is a play on massive global growth, if global growth starts to slow down, that will have a negative effect here. All things being equal, I do think you get a “buy on the dips” type of move, but we just don’t have it yet.

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