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Rupee Could Open Higher In Line With Regional Currencies

The Indian Rupee is likely to open higher and may add gains as the day progresses amid a surge in domestic equities and a weaker dollar index. The forward markets indicate USDINR could open around 82.24. It has been consolidated in a narrow range of 82.50 to 82.20, after touching a life high on Monday. This week, the speculation of RBI intervention in forwards and corporate dollar inflows helped the rupee.

Technically, spot USDINR is having support at 82.10 and resistance at 82.80. The short-termtrend for the pair remains bullish aslong as it trades above 80.70.

A broad-based improvement in risk sentiment is spreading across markets early in Asia, amid softness in the dollar. Asian equities advanced in the wake of a shocking rebound in US stocks that roared back from losses sparked by a hot inflation reading. The S&P 500 closed up 2.6% afterswinging more than 5% during a wild trading day. The benchmark clawed back more than 40% of the losses over a six-day selloff that took it to a two-year low. The Treasury curve flattened, with the yield on policy-sensitive two-year notes up 18 basis points at 4.47%.

Elsewhere, oil gained for the first time this week, with WTI crude rising back above $89 a barrel after a US crude report flagged potential bullish drivers, shrugging off inflation data.

Market bets on rates still lean toward back-to-back 75 basis-point hikes at the next two Fed meetings and expect the central bank to push rates past 4.85% before the tightening cycle ends.

Traders will have a chance to hear more from the Fed on Friday, with Esther George, Lisa Cook and Christopher Waller scheduled to speak later in the day.

Technical Observations:

USDINR October fut. Formed another Doji Candlestick pattern indicating indecisiveness among traders.

The pair has been holding the support of 13 days exponential moving average.

The short-term trend is still up as the chart shows the sequence of a higher top higher bottom formation.

Momentum oscillator, RSI of 14 days period flatten at an overbought zone with negative divergence indicating nearterm consolidation.

Short build-up has been seen with fall in price and rise in open interest and volumes.

USDINR October fut. Could open slightly lower and expected to trade left with downside support at 82.30 and 82.10 while on the higher side 82.60 act as resistance.

USDINR October Futures Daily Chart

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