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Rupee Outlook and Strategy

* The US dollar index gained more than 0.30% on Wednesday to hit a fresh two month high amid resiliency in US economic growth while unease over US debt ceiling talks forced investors to move towards safe havens. Meanwhile, minutes from US Fed last meeting signalled a likely pause in rate hike campaign in June

* Rupee future maturing on May 29 appreciated by 0.17% on Wednesday amid strong FII inflows

* The US$INR is likely to hold the support near 82.55 and expected to rebound towards 82.85 amid firm dollar and rise in crude oil price. Moreover, deteriorating market sentiments following Fitch ratings decision to place the US triple A rating under watchlist could support the safe haven buying in dollar. The bullish crossover of 10 and 20 day EMA would support the pair to stay firm and rise back towards 82.85

Euro and Pound Outlook

* The Euro fell towards the 1.075 mark and slid more that 0.10% on Wednesday amid a strong dollar and weaker global risk sentiments. Further fall in German May Ifo business climate index also weakened the pair. Meanwhile, hawkish comments from ECB members to raise the interest rates further amid high inflation numbers limited the downside in the currency

* The Euro is expected to remain under pressure amid firm dollar and expectation of weakness in German GfK Consumer Climate data. The Euro is likely to move towards the immediate support near 1.0730 as long as it trades under the 10 day EMA at 1.0810. A move below 1.073, would further weaken towards 1.070. EURINR is expected to weaken towards 88.80, as long as it trades under 89.30

* The pound fell below the 1.24 mark, testing its lowest point since April 17 amid stronger dollar. However, sharp downside was cushioned as sticky inflation numbers from UK raise the chances of more rate hikes

* The pound is expected to slip towards 1.2340 amid a strong dollar and weak global risk sentiments. GBPUSD is likely to face the resistance of 10 day EMA at 1.2420 and slide again towards 1.2340. GBPINR could slip towards 101.80 as long as it trades under 102.60

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