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Dollar rebounds on Firm US Treasury Yields - HDFC Securities 

• Indian rupee expected to open lower following overnight strength in dollar after hawkish comments from Federal member mouthed balance sheet reduction which pushed US Treasury yields higher. The forward market indicating USDINR could open around 20 paise higher from previous close.

• On Tuesday, spot USDINR fell for the seventh day in trot following foreign fund inflows and stable crude oil prices. USDINR fell 22 paise to 75.33. The pair is having support around 75.25 from where we could see short covering bounce towards 75.70.

• Asia stocks will face pressure from declines in U.S. equities and rising bond yields. A gauge of the U.S. dollar advanced to a one-week high after twoyear Treasury yields rose to 2.5%, the most since March 2019.

• Federal Reserve Governor Lael Brainard called the task of reducing inflation pressures “paramount” and said the central bank will raise interest rates steadily, while starting balance sheet reduction as soon as next month.

• US Treasury holders took a beating as rates ripped higher across the curve, with the benchmark 10-year reaching 2.54% for its highest yield since spring 2019 while the long bond rose to 2.57% for a princely six basis point premium over the two-year note.

• Russia is facing a fresh round of sanctions after the discovery of civilian murders and other atrocities committed in Ukrainian towns sparked global outrage.

USDINR

Technical Observations:

• USDINR April futures formed Gravestone Doji candlestick pattern, considered as bearish pattern however one should remain cautious at current level at it is near support line.

• The pair is having support at 75.25, the trend line adjoining low of 74.77 and 74.98.

• The pair has already retraced to 75.46, the 76.4% Fibonacci retracement adjoining low of 74.77 and 77.70.

• Relative Strength Index of 14 days period heading south and currently placed at 35 indicating negative momentum.

• MACD and DMI also turned weak on daily chart indicating weaker trend.

• USDINR April futures likely to find support around 75.25 from where we could see short covering bounce to 76 odd levels.

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