#USDINR @ 82.6490 is oscillating in a narrow range above 82.60 ahead of Fed policy. (Pivot Orderbook analysis)

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• USD/INR is oscillating in a narrow range above 82.60 ahead of Fed policy.
• Deepening odds of a smaller interest rate hike by the Fed are also weighing on the return offered on US bonds.
• Capital inflows in India could be trimmed if the banking turmoil stretches further.

The pair currently trades last at 82.6490.

The previous day high was 82.892 while the previous day low was 82.5155. The daily 38.2% Fib levels comes at 82.7482, expected to provide resistance. Similarly, the daily 61.8% fib level is at 82.6593, expected to provide resistance.

The USD/INR pair is displaying a back-and-forth action around 82.60 in the Asian session. The asset is demonstrating a lackluster performance following the sideways cues observed from the US Dollar Index (DXY) observed on Tuesday. The major is expected to continue to consolidate in a narrow range as investors are focusing on the announcement of the monetary policy by the Federal Reserve (Fed).

S&P500 futures look quiet after a two-day winning streak as fears of further shakedown in the United States banking sector have started fading, portraying a risk appetite theme underpinned by the market participants. The US Dollar Index (DXY) has slipped below the intermediate support of 103.20 and is expected to remain on tenterhooks ahead of the interest rate decision by the Fed.

Deepening expectations of a smaller interest rate hike by the Fed are also weighing on the return offered on US Treasury bonds. The 10-year US Treasury yields have trimmed to near 3.58%.

Analysts at CitiBank expect a 25 bps rate hike to take the Fed Funds rate to 4.75-5.0%. Fed chair Jerome Powell is likely to emphasize inflation can be addressed through policy rates, while financial stability can be addressed through other tools. No hike might be interpreted as the Fed is aware of more problems in the banking sector than the public.

On the interest rate guidance, CitiBank expects the median dot for year-end 2023 to rise 25 bps from 5.00-5.25 to 5.25-5.5% and the 2024 dot to rise 25 bps. Fed will also update its quarterly economic forecasts.”

Meanwhile, Indian Rupee is working hard to defend the downside on an argument that the US banking sector crisis would have a negligible impact on the Indian economy.

The State of the Economy report from the Reserve Bank of India (RBI) claims that the direct impact of the US banking crisis on India’s economic activity could be limited. Capital inflows due to global volatility could be trimmed if banking turmoil stretches further.

Technical Levels: Supports and Resistances

USDINR currently trading at 82.6432 at the time of writing. Pair opened at 82.7023 and is trading with a change of -0.07 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 82.3933, 50 SMA 82.1681, 100 SMA @ 82.1285 and 200 SMA @ 81.1506.

The previous day high was 82.892 while the previous day low was 82.5155. The daily 38.2% Fib levels comes at 82.7482, expected to provide resistance. Similarly, the daily 61.8% fib level is at 82.6593, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 82.5145, 82.3268, 82.138
• Pivot resistance is noted at 82.891, 83.0798, 83.2675

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