#USDINR @ 82.4660 The Indian Rupee failed to show strength on the softish US CPI release. (Pivot Orderbook analysis)

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• The Indian Rupee failed to show strength on the softish US CPI release.
• The US macro framework is diluting aggressive Fed rate hiking.
• RBI looks to remain hawkish despite easing inflation.

The pair currently trades last at 82.4660.

The previous day high was 82.6755 while the previous day low was 82.2405. The daily 38.2% Fib levels comes at 82.4067, expected to provide support. Similarly, the daily 61.8% fib level is at 82.5093, expected to provide resistance.

USD/INR is not trading in line with its counterparts. The pair is not catching up with the US Dollar weakness. Falling US Treasury bond yields have led the US Dollar to lower. Despite that, the Indian Rupee failed to capitalize.

The United States Consumer Price Index (CPI) released on Tuesday had put the US Dollar on the sideline, as the inflationary matrix comes in line with expectations. The headlines MoM reading came in at 0.4% as expected, from the prior 0.5%, and YoY came in at 6.0% as expected, from the prior 6.4%. The core matrix MoM came in at 0.5% slightly higher than the 0.4% expected, and YoY came in at 5.5% in line with expectation.

The ex-shelter component signaled a slowdown, which is a beneficiary for the Federal Reserve (Fed). Starting this week, the Silicon Valley Bank’s (SVB) fallout has thrown a fresh wave of pessimism among investors, as the US banking regulators intervene to tackle the situation through a backstop as a rescue plan. But this situation has prompted a pessimistic mindset among investors for possible contagion risks.

Moving on to the US macro release, the calendar is due for US Retails Sales and Producer Price Index (PPI) on Wednesday, as well as the Empire State Manufacturing Index. It will be important to watch the Control Group from US retail sales as an impetus prior to the March FOMC meeting.

On the other hand, India’s Consumer Price Index (CPI) for February rose 6.44% YoY versus 6.35% expected and 6.52% prior. The aforementioned data will provide the Reserve Bank of India (RBI) to tick down on the hawkish bias, even though the market is still expecting a 25 basis point hike (bps) hike from the RBI. Despite of positive growth outlook and RBI’s hawkish stance, the Indian Rupee has failed to show strength.

Technical Levels: Supports and Resistances

USDINR currently trading at 82.4625 at the time of writing. Pair opened at 82.2958 and is trading with a change of 0.2 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 82.434, 50 SMA 82.1336, 100 SMA @ 82.1202 and 200 SMA @ 81.0343.

The previous day high was 82.6755 while the previous day low was 82.2405. The daily 38.2% Fib levels comes at 82.4067, expected to provide support. Similarly, the daily 61.8% fib level is at 82.5093, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 82.1324, 81.9689, 81.6974
• Pivot resistance is noted at 82.5674, 82.8389, 83.0024

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