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The Indian rupee is expected to open with minor gains ahead of the RBI monetary policy decision. The RBI will likely raise its benchmark repo rate by 25 bps to 6.75% before going on pause. However, the strength of the greenback against major currencies will limit the gains for the rupee. The forward market indicates USDINR opening between 81.97 to 81.95. On Wednesday, spot USDINR fell 0.40% to 82 following dollar inflows and stronger domestic equities. Technically, the pair has support at 81.70 and resistance at 82.50. Asian stocks fell with US equity futures and government bonds rallied against the backdrop of weaker-than-expected economic data that supported forecasts for recession. A dollar gauge climbed to its daily high during New York trading and the yen strengthened amid a renewed flight to safety, weaker-than-estimated readings on US jobs and services sparked fears that a recession might be in store. The flight to safety reflected signs of a slowing US economy ahead of crucial data to be released later Friday. Private payroll data from ADP also underwhelmed relative to expectations. The data precede Friday’s US payrolls report, which is forecast to show employers added about a quarter of a million jobs last month and the unemployment rate held at a historically low level. A recent drop in global bond yields has created favourable conditions for the Bank of Japan to scrap its yield curve control program this month, according to a former BOJ executive director in charge of monetary policy. BOJ Governor Kuroda departs leaving an $11.7 trillion experiment to his successor. Elsewhere, oil's rally halted with WTI trading around $80. US crude inventories fell by 3.7 million barrels last week. Meantime, Saudi Aramco raised its official selling prices to Asia for the third month in a row

Technical Observations:

USDINR April fut has broken the rising trendline, adjoining previous swing lows, support of 82.10 The pair has been placed well below the short-term moving average of 21 days. Momentum Oscillator, RSI of 14 days period is placed below 50 and weakening on the daily chart. MACD has been placed below a zero line and stayed below the moving average. Long unwinding has been seen on Wednesday as price, open interest and volume declined. The pair has support at 81.90 and 81.45 while continuing to resist at 82.67. We turned bearish on USDINR April fut with downside support at 81.45, keeping stop loss above 82.50

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