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The Indian rupee is expected to start open on a muted note after Tuesday’s plunge. The local unit chocked largest single-day fall in a month after broadly consolidating in the range of 81.60 to 82 in more than three weeks. Spot USDINR gained 24 paise to 82.05.

Technically, spot USDINR is having resistance at 82.30 and support at 82.60. The trend reversal can be seen only above 82.50 while the range can shift upward from 81.60-82 to 81.80 to 82.30

The dollar weakened marginally versus all of its Group-of-10 peers. Treasury yields steadied following muted reaction in the futures market after President Joe Biden and congressional Republicans made little tangible progress toward averting a first-ever US default.

Asian stocks traded mixed on Wednesday ahead of a critical inflation report. US equities fell as the debt ceiling impasse reaches the next level. Republican House Speaker Kevin McCarthy rejected the possibility of short-term extension hours ahead of a meeting with President Joe Biden.

The Fed's John Williams (pictured) is open to an FOMC pause next month. Further out, there's no case for cuts this year.

Fed Governor Philip Jefferson said credit availability has contracted as banks tighten lending standards, but he was hopeful the economy would continue to grow.

Elsewhere, oil edged lower after API data showed US crude inventories rose by 3.6 million barrels last week. Futures settled higher on Tuesday after the Biden administration announced plans to replenish strategic reserves later this year.

The focus now shifts to today’s inflation print for April. The headline month-on-month reading is forecast to bounce, while the core is expected to match the March figure. The pace of US consumer inflation probably stayed at 5% year on year in April, while accelerating to 0.4% month on month.

Technical Observations:

USDINR May fut. took support at 81.60 and back above the short-term moving average.

The pair reclaimed the lost ground on Tuesday and reached to three-week high range.

Momentum Oscillator, RSI of 14 days period turned upward and placed above 50. MACD has been placed below a zero line but given a positive crossover.

Long buildup has been seen with a rise in price, open interest and volumes.

The pair has support at 81.50 and resistance at 82.30.

USDINR May fut has resistance at 82.30 and support at 81.60. The bias will turn bullish only above 82.30.

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