FUNDAMENTALOVERVIEWUSD:The USDollar strengthened yesterday following strong USJobless Claims data. Traders responded by erasing the dovish bets seenafter the softer than expected US core inflation data. The total easing by year-end fell to 48 bpscompared to 54 bps before the release. Fedmembers continue to support the current patient and data-dependent stance, andthe improvement in jobs data is underpinning the greenback. This bullish dollar momentum will likely persist or even accelerate if the data keeps on strengthening. INR:The Indian Rupee remainson a bearish structural trend against the US Dollar, and the latest technicalbreakout increased the momentum as RBI’s interventions continue to fail.The latest India’sannual inflation rate increased to 1.33% in December compared to 0.71% inNovember. This is still way below the RBI’s 4% target but closer to the bottomof their tolerance band at 2%. Traders don’t expect the RBI to deliver anotherrate cut at the upcoming meeting in February. On the tradefront, traders are watching for potential tariff hikes on India after Trumpthreatened to impose 25% tariffs on any country doing business with Iran as theUS President continues to put pressure on the regime. India has been among thelargest Iran’s trade partners in recent years, so traders are watching for therisk of another escalation. USDINR TECHNICALANALYSIS – DAILY TIMEFRAMEOn the dailychart, we can see that USDINR finally broke above the key resistance zonearound the 90.40 level. The buyers piled in more aggressively on the breakouttargeting a rally into the upper bound of the channel around the 92.00 handle. Thisremains a buy-on-dips market, so the sellers will likely need to wait for theprice to come into the upper bound of the channel or break below the bottomtrendline.USDINR TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hourchart, we can see more clearly how the breakout led to a quick surge as buyerspiled in with more conviction. If we get a pullback into the resistance nowturned support, we can expect the buyers to step back in with a defined riskbelow the support to keep pushing into the upper bound of the channel. Thesellers, on the other hand, will need the price to fall back below the supportto pile in for a deeper pullback into the lower bound of the channel. USDINR TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hourchart, there’s not much else we can add here as the buyers will look fordip-buying opportunities around the 90.40 support, while the sellers willcontinue to wait for a break lower. This article was written by Giuseppe Dellamotta at investinglive.com.