FUNDAMENTALOVERVIEWUSD:The USdollar strengthened across the board heading into the weekend as traders hedgedon risks of a potential ground invasion. This morning, we are seeing someweakness as those hedges get unwound. The focusremains solely on the US-Iran negotiations and there’s some cautious optimismas Pakistan confirmed that negotiationsmay take place in Islamabad in the coming days and Trump said that they are performingextremely well and they could make a deal pretty soon, although headded that they might fail as well.The pathof least resistance for the dollar remains to the upside. Traders will keep awatchful eye on the headlines and especially on Trump’s Truth Social account,as we are always one post away from huge market moves. Tradersare not pricing in any change to interest rates this year as we have just 5 bpsof tightening expected by year-end.INR:The Indian rupee openedhigher today after the RBIcapped the open positions banks can hold in the onshore currencymarket at $100 million at the end of each trading day. This measure was announcedon Friday after market close. The central bankcontinues to intervene in the market but with no avail. In fact, the gains werequickly faded, and the rupee is now trading around Friday levels again. Traders continueto focus on the US-Iran negotiations and the risks of further escalation. If wedo get an escalation like a ground invasion, then we will likely see the USDINRpair skyrocketing again. On the other hand, if the US and Iran reach a deal or Trumpdecides to pull back militarily and end the hostilities, then we should get ameaningful correction. In the bigpicture, the Indian Rupee remains on a bearish structural trend against the US dollar,so the dip-buyers will likely look for opportunities around strong technicallevels to keep pushing into new highs.USDINR TECHNICALANALYSIS – DAILY TIMEFRAMEOn the dailychart, we can see that USDINR opened near the upper bound of the broken channel and rose immediately as dip-buyers quickly piled in to fade the intervention. If the price fallsback to the upper bound of the channel, we can expect the buyers to step in tokeep pushing into new highs. The sellers will need the price to fall below the upperbound of the channel to regain some control and target a bigger correction intothe lower bound of the channel. USDINR TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hourchart, we can see how quickly traders faded the RBI’s intervention once again.The price is now trading right around Friday’s levels. We can expect thesellers to step in here with a defined risk above the highs to position for adrop back into the upper bound of the channel. The buyers, on the other hand,will look for a break higher to increase the bullish bets into new highs.USDINR TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hourchart, there’s not much we can add here as the sellers will look for a pullbackinto the lower bound of the channel, while the buyers will target a break.UPCOMING CATALYSTSToday we have Fed Chair Powell speaking. Tomorrow, we get the US ConsumerConfidence and US Job Openings data. On Wednesday, we have the US ADP, the USRetail Sales and the US ISM Manufacturing PMI. On Thursday, we get the latestUS Jobless Claims figures. On Friday, we conclude the week with the US NFPreport. This article was written by Giuseppe Dellamotta at investinglive.com.