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The overnight recovery in the dollar index and risk-averse sentiments could weigh on the rupee in opening trade. The forward market indicates the local unit could open at 81.94. However, with the lower crude oil prices and stronger regional currencies, the rupee hovers around 82 through the day.

On Tuesday, spot USDINR ended almost flat after fluctuating in the narrow range in the absence of fresh cues. Technically, the pair is still in the downtrend with downside support at 81.70 and resistance at 82.30.

The dollar climbed for the first time in four days as US equities sold off while consumer confidence dipped to the lowest since July. The yen also advances amid haven demand.

We believe month-end dollar demands, shifting models and hedging activity are all factors that could extend the gains in the greenback in the days ahead but stall in the new month.

There was a divergence between the US dollar and US treasury yield as the US Treasury 10-year yields fell 4 basis points to 3.40%, adding to a drop of eight basis points on Monday

Asian stocks fell following weak handover from the US equities as fears of a banking crisis reappeared. Robust earnings from Microsoft Corp. and Alphabet Inc. buoyed US futures. The S&P 500 had slid 1.6% and the Nasdaq 100 had ended 1.9% lower on Tuesday.

Elsewhere, crude oil ticked slightly higher amid demand concerns that may drive refineries to cut throughput

US Philadelphia, Richmond and Dallas regional growth figures were all weak, joining below-estimate data from Chicago on Monday. In addition, US consumer confidence dropped this month to the lowest since July. The figures suggest consumers are turning sour on the economy amid expectations that the labour market will soon begin to soften

Technical Observations:

USDINR May fut. has upward-slopping trendline support at 81.80, as shown in the chart

The pair has been placed well below the short-term moving average of 21 days

MACD has been placed below a zero line and flattening indicating a weak trend.

Long buildup has been seen ahead of the April contract expiry. We have seen an increase in price, open interest and volume

The pair has support at 81.80 and resistance at 82.43, the 200 DMA.

We remain bearish on USDINR in May future as long as it trades below 82.60 while on the downside 81.80 and 81.45 becomes the support.

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