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The Indian rupee is expected to open slightly lower at 82.53 following foreign funds selling the domestic equities and the dollar index recovered. However, it could trade lower on an expectation of dollar outflows from big corporates. The one-month forwardUSDINR waslast quoted at 82.73, gains 4 paise fromyesterday’s 5 pm (IST)

On Wednesday, spot USDINR declined 21 paise to 82.50 as domestic equities gained and corporates sold the dollar. Technically, the pair has resistance around 82.70, the descending trend line adjoining the previous two swing highs. It has support at 82.10

The yield on 10-year bonds rose only three basis points on Wednesday after the Reserve Bank of India kept the door open for further policy tightening. Expectations for growth and inflation and cautious commentary from policymakers point to another rate hike in April afterraising the interest rate by 25bps on Wednesday.

The greenback rose broadly as Federal Reserve speakers reinforced the idea that interest rates will need to keep climbing to quash inflation, spurring a slide in US shares. Weakness in the equities market aggravated by a report by the Group of Seven member states is discussing whether to sanction companies in China, Iran and North Korea for aiding Russia.

The offshore yuan is weaker after comments from President Xi Jinping on self-reliance and US President Joe Biden at the State of the Union.

The knock-to-risk sentiment hinged on comments from four Fed officials who spoke at separate events Wednesday and reinforced a shared message: the fight against inflation is not yet won. Fed-fund futures markets are priced in higher rates, with some options traders betting the US policy benchmark will reach 6%.

Elsewhere, oil steadied during trading in Asia after rallying about 7% over the previous three sessions as investors assessed the latest commentary from Fed officials and mixed Energy Information Administration data.

USDINR

Technical Observations:

USDINR February futures formed a bearish candle following the “Doji Candlestick”.

The pair has downward slopping trend line resistance at 83.18, coinciding with a 61.8% Fibonacci extension level adjoining a recentswing.

It has support at 82.28, the 10-day exponential moving average.

Momentum oscillator, Relative Strength Index is hovering around 60, a sign of positive momentum.

The derivative data shows a short buildup as the price declines while open interest rises.

USDINR February futures is expected to slightly higher and oscillate within 82.80 to 82.40

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