FUNDAMENTALOVERVIEWUSD:The USdollar rallied across the board on safe haven demand as US-Iran conflicterupted over the weekend. The main driver though was the market’s realisationthat rate cuts might not come as soon as expected. In fact,higher oil prices will eventually put upward pressure on inflation and Monday’sISM Manufacturing PMI showed how wrongthe market has been in being so dovish on the economy. The data was hot for thesecond consecutive month, so the one-off narrative was put to rest. Moreover,the prices index jumped to the highest level since 2022, in another sign thatinflationary pressures remain high. Traders pared back their rate cut bets thisweek with the total easing by year-end now seen around 44 bps vs 58 bps onFriday. INR:In the big picture,the Indian Rupee remains on a bearish structural trend against the US dollar. Thisweek, the bearish momentum increased substantially due to strong risk aversionin the markets. Moreover, supplydisruptions through the Strait of Hormuz and a renewed surge in global oilprices led traders to expect a negative impact to the Indian economy. In fact,almost 90% of India’s crude oil requirement is imported and 55% comes from the MiddleEast. A de-escalationcould give the INR a boost in the short-term which will likely be a good opportunityfor traders to buy the dip in the USDINR pair as the main uptrend will likelyremain intact. USDINR TECHNICALANALYSIS – DAILY TIMEFRAMEOn the dailychart, we can see that USDINR has been creeping up slowly as dip-buyers started to pile in nearthe lower bound of the channel and exploded this week as the US-Iran war eruptedover the weekend. The target remains the top trendline around the 93.00 handle.That’s where we can expect the sellers to step in with a defined risk above theupper bound of the channel to position for a drop back into the bottomtrendline. The buyers, on the other hand, will look for a break higher toincrease the bullish bets into new highs.USDINR TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hourchart, we can see the price broke through the previous record high today andpulled back as the sellers stepped in. There’s not much we can glean from this timeframe,so we need to zoom in to see some more details.USDINR TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hourchart, we can see an upward trendline defining the bullish momentum. The buyerswill likely continue to lean on the trendline with a defined risk below it tokeep pushing into the 93.00 handle. The sellers, on the other hand, will look fora break lower to pile in for a pullback into the 91.00 handle next.UPCOMING CATALYSTSToday we have the US ADP and the US ISM Services PMI. Tomorrow, we get thelatest US Jobless Claims figures. On Friday, we conclude the week with the USNFP report. The data might not matter much this week amid the US-Iran conflictthough. This article was written by Giuseppe Dellamotta at investinglive.com.