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Rupee Outlook and Strategy

* The US dollar index paused after rallying to its one month peak last week as traders awaited news from Washington on how to address the debt ceiling issue. Further, a decline in the US May Empire manufacturing index to a four-month low also weighed on the dollar. Meanwhile, hawkish comments from Fed members to keep rates higher during 2023 has limited the downside in the dollar index

* Rupee future maturing on May 29 depreciated by 0.11% on Monday amid rebound in crude oil prices

* The US$INR is likely to face the hurdle near 82.40 and move back towards 82.10 amid weakness in dollar. Meanwhile, the downside in dollar could be restricted amid expectation of improvement in US retail sales number. For the day, US$INR is expected to move in a sideways range of 82.10-82.40 ahead of US debt ceiling talks

Euro and Pound Outlook

* The Euro edged higher amid weakness in the dollar. The Euro also found support as the European Commission raised its eurozone 2023 GDP and inflation forecasts. Earlier, the Euro declined to its five-week lows as the eurozone industrial production numbers hit their eight month lows. Further, a drop in German April wholesale price by 0.4% also restricted its upside

* The Euro is expected find support and move back towards 1.09 amid expectation of better Trade balance and Flash employment numbers. However, expectation of weakness in German ZEW economic sentiments could dent the recovery in the pair. Meanwhile, traders will eye on ECB President Laggard's speech towards the later half of the day. The pair is expected to hold the support of the lower Bollinger band channel near 1.085 and rebound towards immediate resistance at 1.090. The weakness in the oscillator RSI (44) could limit it to go beyond 1.090. For the day, the Euro is expected to move inside 1.085-1.090. EURINR is expected to consolidate inside 89.25-89.75

* The pound gained the most on Monday as the dollar retreated from its one month high. The improvement in global risk sentiments has supported the pair to regain its strength

* The pound is expected to extend its rebound on the back of weaker dollar. Further, expectation of steady growth in the UK job numbers could also support the pair to rise towards 1.2560. The pound has moved above the 20 day EMA at 1.2510. Now it has to move above 1.2560 to extend its rally towards 1.2590. The formation of bullish engulfing pattern in GBPINR could support the upside in the pair and push it towards 103.35

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