INR: Temporary Breather Expected

Despite a lack of bullish divergence on the relative strength index, the Indian rupee should enjoy a decent bounce against the US dollar given the currency's deeply-oversold nature and strong correlation with global risk appetite (developed market equity markets, in particular, look ripe for a relief rally). Technically speaking, several gaps to the upside - at INR48.50/US$ and INR46.50/US$ in the first instances - are likely to be filled.

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