The Indian Rupee erases all monthly gains amid the US-Iran stalemate

FUNDAMENTAL OVERVIEWUSD:The US dollar has come under renewed pressure despite the lack of progress in the US-Iran negotiations and the Strait of Hormuz closure. What has been weighing on the greenback to start the week was the news saying that Iran proposed to reopen the Strait of Hormuz if the US blockade is lifted and then hold nuclear talks later. This constant push towards a diplomatic resolution instead of another full-fledged war has been supporting the risk sentiment on expectations that a deal would be reached eventually. On Wednesday, we have the FOMC policy decision and although the Fed is expected to keep everything unchanged amid the US-Iran uncertainty, there’s a risk of a more hawkish leaning due to resilient US data and the elevated energy prices. A neutral Fed shouldn’t bring much volatility, but a more hawkish one could give the US dollar a significant boost given the recent selloff.INR:On the INR side, the US-Iran stalemate led to another selloff with the Indian Rupee erasing all the gains since the start of the month. The currency will likely remain under pressure as long as the situation in the Strait of Hormuz remains unresolved. In the big picture, the Indian Rupee remains on a bearish structural trend against the US dollar, so the dip-buyers will likely look for opportunities around strong technical levels to keep pushing into new highs. USDINR TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that USDINR rose back above the upper bound of the channel opening the door for new highs. The buyers piled in on the break targeting a new record high, while the sellers will now need to wait for the price to fall back below the upper bound to regain some control and target new lows.USDINR TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see the break of the resistance around 94.00 handle that should now act as support. If we get a pullback, we can expect the buyers to step in around the support with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break to pile in for a drop into the 92.00 handle next.USDINR TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see the price broke above the minor counter-trendline today. More aggressive buyers might pile in around these levels with a defined risk below the most recent swing low to keep pushing into new highs, although the risk to reward setup would be better around the support. UPCOMING CATALYSTSTomorrow we get the US Consumer Confidence report. On Wednesday, we have the FOMC policy decision. On Thursday, we get the US Q1 GDP, the US Employment Cost Index and the latest US Jobless Claims figures. On Friday, we conclude the week with the US ISM Manufacturing PMI.