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  • The Rupee is likely to weaken, tracking the rally in oil prices. 
  • USD/INR will likely test resistance at 72.12.

The USD/INR pair looks set to test key resistance above 72.00 with oil rallying to multi-month highs on US-Iran tensions.

Brent oil is currently trading at $70.42, its highest level since May 2019. The black gold is currently representing a 16.7 percent gain on the low of $60.32 registered in early December.

India imports more than 80% of its oil requirements and the rise in crude prices increases India’s annual oil import bill.

Hence, markets are likely to offer Rupee, pushing USD/INR to 72.12 – resistance of the weekly chart contracting triangle.

A weekly close above 72.12 would imply a resumption of the rally from July lows near 68.30 and open the doors for beak above 73.00

Weekly chart

Trend: Bullish

Technical levels