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The Indian rupee could open higher versus the dollar after overnight recovery in the risk assets as February US CPI matched expectations with a 6% year-over-year headline advance. The forward markets indicate USDINR could open at least 20 paise higher from the previous close of 82.49

On Tuesday, spot USDINR gained 36 paise to 82.49 amid risk-averse moods and foreign fund outflows. On the daily chart, the pair is trading in a symmetrical triangle. The pair has been consolidating between 81 to 83 since October 2022. The medium-term outlook remains neutral to bullish as long as it trades above 81 while in the short term, the pair could remain volatile within range

The dollar index was little changed as a core measure of US consumer prices rose in February by the most in five months, with markets seeing Federal Reserve officials as likely to weigh still-rapid inflation against banking turmoil in their next interest-rate decision. The core consumer price index increased 0.5% in February, slightly ahead of the median estimate of 0.4% and enough to keep pressure on policymakers to hike rates. The Index traded 0.1% lower after rising as much as 0.4% in earlier trading.

The US two-year Treasury yield was up 21 basis points at 4.19%, giving up some of Monday’s drop. Swaps pricing is back to positioning for the Federal Reserve to lift rates by a quarter percentage point next week after the odds of an increase had slipped to nearly 50-50 on Monday.

Japan’s 10-year yield rose while the 20-year rate surged 12.5 basis points after the central bank lowered purchases.

Asian equities climbed Wednesday as investors wagered that the worst of the global fallout from the American banking sector has passed. US stocks rallied into the close, helping set the tone for a shift in sentiment Wednesday.

Elsewhere in markets, oil rose from its lowest close in three months as traders took stock of the outlook for demand

Technical Observations:

USDINR March futures retraced back to a 20-day simple moving average.

It has been trading in a symmetrical triangle since October

The pair has downward-slopping trend line resistance at 83.10 and an upward-slopping trend line support at 81.10

Momentum oscillator, Relative Strength Index 14 day reclaimed the 50 and currently placed at 52.5.

MACD also turned up but remained below the zero line.

The derivative data shows a short-covering rally as the price rose while open interest declined.

The bias for USDINR March fut. remains neutral as long as it trades between 81 to 83.

bvIn the near term, USDINR March futures could head higher towards 83 and hold the support of 81.70.

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