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Rupee Outlook and Strategy

• The US dollar index retreated from its earlier gains after the US Federal Chair Jerome Powell struck a moderately dovish stance. In his speech, he indicated a preference to slow rate hikes. Furthermore, pause in negotiations to raise the Federal government’s $31.4 trillion debt ceiling also pressured the dollar.

• Rupee future maturing on May 29 depreciated by 0.18% on Friday amid strong dollar

• The rupee is likely to face the hurdle near 82.90 and move towards the immediate support near 82.50 amid softness in dollar. Further, increasing probability of no hike in next FOMC meeting would hurt the dollar. As per the CME FedWatch tool, markets are now pricing in 85% probability of the Fed standing pat on rates next month. Moreover, weakness in crude oil prices could also help the rupee to appreciate back towards 82.50. Below 82.50, next support holds near 82.30

Euro and Pound Outlook

• The Euro shook off early losses and moved higher on a weaker dollar and hawkish ECB comments from ECB President. ECB President Lagarde said interest rates need to be "sustainably" high to curb inflation, and the ECB needs to "buckle up and deliver" its 2% inflation target. Earlier , the weakness in German PPI numbers has weakened the Euro to went past the 1.08 mark

• The Euro is expected to regain its strength amid weakness in dollar. Further expectation of improvement in Eurozone consumer confidence number would also support the pair to rise back towards 1.0840. EURUSD is expected to take support of the lower Bollinger band at 1.077 and rebound towards the immediate resistance at 1.0840(50 DEMA). EURINR has formed a bullish engulfing pattern near 89.10, which would support the pair to rise back towards 90.00.

• The pound held the support near 1.24 and witnessed a sharp rebound on Friday amid retreat in the dollar. Further, increase in average price of homes coming to the market jumped by 1.8% from April has also helped the pound to regain its strength

• The pound is expected to move back towards 1.25 amid weakness in dollar. The pound is trading near the 50 day EMA at 1.2409, which would support it to hold its gains and move towards the 20 day EMA at 1.25. The oscillator indicates a sideways bias in the trend, as RSI still steadies near the 50 mark. GBPINR is expected to hold the support near 102.80 and inch higher towards 103.40

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