Jan 11, 2017 10:48 AM IST IST | Source: Moneycontrol.com

Buy USDINR; target of 68.50 - 68.70 ICICI Direct

ICICI Direct expects USD to find supports at lower levels. Utilise downsides in the dollar to go long on the USDINR. Buy January Futures with a target of 68.50 - 68.70.

ICICI Direct's report on currency

Debt market  
Government bond bonds were little changed after a fresh supply of state  government debt weighed on investor appetite  • The benchmark 6.97% 2026 bond yield remained unchanged at 6.40% in  previous day  • Yield on the US 10-year yield rose to 2.38% from 2.36% on Tuesday.  

Forex (US$/INR)  
The rupee pared gains after a strong opening as domestic factors continue to weigh on rupee. Outflow redemptions, rise in crude oil prices and news of lower expectation of GDP data is weighing on the rupee in the near term  • The US dollar index rose against major currencies as US yields  recovered amidst ranged consolidation. Major currency pairs continue to  trade in range ahead of commencement of Donald Trump’s presidency.  

US$/INR derivatives strategy  
In the currency futures market, the most traded dollar-rupee January  contract on the NSE ended at 68.32.  The January contract open interest  fell by 0.09% from the previous day  • February contract open interest rose 1.20% from previous day  • We expect the US$ to find supports at lower levels. Utilise downsides in  the dollar to go long on the US$INR pair.

Intra-day strategy
US$INR January futures contract (NSE) View: Bullish on US$INR
Buy US$INR in the range of 68.25-68.35 Market Lot: US$1000
Target: 68.50/ 68.70 Stop Loss: 68.15
Support Resistance
S1/ S2: 68.30 / 68.10 R1/R2:68.50/68.70







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