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The Indian rupee is expected to open slightly up following stronger regional currencies and risk-on sentiments. The implied opening from forwards suggest spotmay starttrading around 83.38. On Monday, spot USDINR was little changed at 83.3900 with thin volume.

Technically, the pair is stuck between 83.25 to 83.50 since past one month. We believe the pair is expected to trade within the said range for few more days.

Traders in India will be waiting for retail inflation data due after market hours Tuesday.

India’s November CPI is likely to show inflation quickening to 5.7% from 4.9% in October. A lower year-earlier base and shortages of onions and tomatoes due to unseasonalrainslikely lifted food inflation. The dollar is trimming session gains as risk tone improves following Treasury 10- year auction results. Trading volumes were muted ahead a highly-anticipated US consumer inflation report Tuesday and Federal Reserve’s policy decision Wednesday.

Meanwhile, the yen is strengthening after its biggest decline in more than a month on Monday triggered by a report that says Bank of Japan officials see little need to rush to scrap negative interest ratesthis month. Shares in Asia rose ahead of key US economic data and meetings from major central banks that will give fresh clues about the likelihood of interest-rate cuts next year.

Tuesday’s consumer price index will give Wall Street a sense of whether the disinflation trend is continuing. The report will be released a day before the last scheduled Federal Reserve decision of 2023, with officials widely expected to hold rates and announce their Summary of Economic Projections.

Technical Observations:

* USDINR Dec future formed a gravestone doji candlestick pattern, which implies a bearishness.

* However, the pair is steady above the short-term moving average of 10 days.

* Momentum Oscillator, RSI of 14 days period is almost flat and is placed above 50 on the daily chart.

* MACD has been placed above a zero linewith a flattish note.

* Long unwinding has been seen as price and open interestfell.

* Short Term Trend: Neutral/sideways Expected Trading Range: 83.30 to 83.50 Intraday Recommendation: Sell USDINR Dec. Fut. at 83.45/83.48 SL 83.53 Target 83.32

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