FUNDAMENTALOVERVIEWUSD:The US dollar bounced back this week as US-Iran risks resurfaced after bothparties exchanged attacks. The US launched a series of strikes on Iran in response to Iranian attackson three vessels in the Strait of Hormuz. Iran retaliated by bombing US basesin Bahrain and Kuwait, warning of further strikes if the US continued.It was looking like the usual limited escalation we got used to in the pastmonths, but everything changed when Trump said to reporters at the NATO summitin Turkey that the Memorandum of Understanding was over for him and he didn’twant to engage with them anymore. Oil prices jumped further and inflation worries returned. This triggered ahawkish repricing in interest rate expectations across the board. The chancesfor a July hike jumped to 34% (was 25% yesterday) and the total tightening byyear-end increased to 38 bps (was 30 bps yesterday). INR:On the INR side, theRupee started to fall again in recent weeks as the market focus shifted fromoil prices to Fed tightening risks after the last FOMC decision. The tight correlationwith oil prices has returned this week following the US-Iran escalation in theStrait of Hormuz. Today, the Rupee’sslide accelerated as oil prices spiked hard after Trump said that the Memorandumof Understanding with Iran was over for him and he didn’t want to engage withthem anymore. In the bigpicture, the Indian Rupee remains on a bearish structural trend against the US dollar,so dip-buyers will continue to look for opportunities around strong technicallevels to keep pushing the USD/INR pair into new highs. USDINR TECHNICALANALYSIS – DAILY TIMEFRAMEOn the dailychart, we can see that USDINR is approaching the first key resistance zone around the 96.10 level.If the price gets there, we can expect the sellers to step in with a definedrisk above the resistance to position for a drop back into the 94.00 level. Thebuyers, on the other hand, will look for a break to increase the bullish betsinto the record highs around the 97.33 level. USDINR TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hourchart, we can see the price retested the broken resistance turned supportaround the 95.10 level and rallied into new highs following the US-Iran escalation.We now have an upward trendline defining the bullish structure. If the price fallsinto the trendline, we can expect the buyers to lean on it with a defined riskbelow it to keep pushing into new highs. The sellers, on the other hand, willlook for a break to pile in for a drop into new lows.USDINR TECHNICALANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hourchart, there’s not much we can add here as the sellers will have a better riskto reward setup around the 96.10 resistance, while the buyers will either waitfor a break above the resistance or a pullback into the trendline. UPCOMING CATALYSTSToday, we have the FOMCmeeting minutes. Tomorrow, we get the latest US Jobless Claims figures. This article was written by Giuseppe Dellamotta at investinglive.com.