#USDINR @ 81.8430 is aiming to defend its immediate support of 81.70 as RBI has yet not reached to pivot rate. (Pivot Orderbook analysis)

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• USD/INR is aiming to defend its immediate support of 81.70 as RBI has yet not reached to pivot rate.
• Mounting China-Taiwan tensions have triggered the risk-off market mood.
• Further movement in the USD Index is likely to be guided by the US inflation data.

The pair currently trades last at 81.8430.

The previous day high was 81.95 while the previous day low was 81.7741. The daily 38.2% Fib levels comes at 81.8828, expected to provide resistance. Similarly, the daily 61.8% fib level is at 81.8413, expected to provide support.

The USD/INR pair has shown a minor recovery from 81.75 in the Tokyo session. The recovery move in the major is backed by a responsive move in the US Dollar Index (DXY). The USD Index found attention from responsive buyers as China-Taiwan tensions get escalated after the Chinese military surround Taiwan Island with aircraft and ships. Also, the Chinese Defence Ministry is quickly drilling around Taiwan, strengthening the risk-off mood.

S&P500 futures are showing nominal losses after surrendering gains generated in the opening session as investors are getting precautionary ahead of the quarterly earnings season. Also, rising fears of a recession in the United States are impacting equities. The USD Index rebounded firmly to near 102.20 but is struggling in extending recovery further.

Meanwhile, the alpha generated on US government bonds has dropped despite mounting expectations of consecutive 25 basis points (bps) interest rate hike from the Federal Reserve (Fed). The 10-year US Treasury yields have dropped sharply to near 3.37%.

Further movement in the USD Index is likely to be guided by the US inflation data, which will release on Wednesday. The investing community is anticipating a rebound in core inflation figures as a higher labor cost index due to the tight labor market is making overall demand resilient.

On the Indian Rupee front, Reserve Bank of India (RBI) Governor Shaktikanta Das kept the interest rate policy unchanged for the first time since May 2022. RBI Governor cited contagion fears from global banking turmoil as a major reason for keeping rates steady. He further added that the central bank reached its pivotal rate yet and a steady policy is a cautionary move to maintain economic prospects.

Going forward, Indian investors will keep an eye on oil prices, which have been sideways for a week. The oil price is auctioning in a bounded territory after a gap-up move inspired by the surprise announcement of production cuts from OPEC+. It is worth noting that India is one of the leading importers of oil in the world and higher oil prices would impact the Indian Rupee.

Technical Levels: Supports and Resistances

USDINR currently trading at 81.8175 at the time of writing. Pair opened at 81.8741 and is trading with a change of -0.07 % .

The pair is trading below its 20 Daily moving average @ 82.2859, below its 50 Daily moving average @ 82.3619 , below its 100 Daily moving average @ 82.2088 and above its 200 Daily moving average @ 81.3962

The previous day high was 81.95 while the previous day low was 81.7741. The daily 38.2% Fib levels comes at 81.8828, expected to provide resistance. Similarly, the daily 61.8% fib level is at 81.8413, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 81.7821, 81.6901, 81.6062
• Pivot resistance is noted at 81.9581, 82.042, 82.134

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