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Rupee could open slightly higher as Yen recovers

* Indian rupee is expected to open higher on Friday following global cues with weaker dollar. The trend is expected to remain still bearish while traders can witnessed some breather fromthe currentlevels.

* Overall the pair is in bullish trend with upward moving channel where a correction towards 78 should be consider as buying opportunity.

* The U.S. dollar has slipped from recent highs, but not too far as investors remain cautious. The battered yen has steadied this week and drew a little support on Friday from Japanese inflation topping the Bank of Japan's 2% target for a second straightmonth.

* Federal Reserve Chairman Jerome Powell concluded a second day of congressional testimony with a vow to battle inflation, even if it risks a recession. Reason for the rise could be anything out of Dip buyers, bottom pickers, quarter-end rebalancing,rotation out of commodities into stocks.

.* The S&P U.S. services index fell to a five-month low of 51.6 in June from 53.4 in the prior month, based on flash or preliminary survey. The U.S. manufacturing index, meanwhile, slid to a nearly two-year low of 52.4 from 57 in the prior month.

* The benchmark 10-year Treasury yield fell 7 bps overnight and was steady at 3.0944%..

Technical Observations:

* USDINR June futures facing resistance around 78.50, the upper line of ascending channel. .

* The pair has been holding bullish sequence of higher top higher bottom. 

* Derivative data is suggesting long unwinding as price and open interest declined.

.* Relative Strength Index of 14 day oscillating around overbought with upward directions.

* MACD has flatten on a daily chart indicating consolidation in up trend.

* +DI is placed well above –DI and ADX line strengthening indicating bullish trend.

* USDINR June futures could head towards 79 once the level of 78.50 get clear while hold the support around 77.90.

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