Oct 18, 2016 10:13 AM IST IST | Source: Moneycontrol.com

Sell US$INR October Fut; target of 66.85 - 66.65: ICICIdirect

ICICIdirect.com has expect the US dollar to find buying support on decline against the rupee. Utilise declines in the US$/INR October contract to Sell target of 66.85 - 66.65.

ICICIdirect.com's report on currency

Currency

Debt market  

• Government bonds ended little changed, as investors remained on the  sidelines in the absence of major triggers, amid expectations that  inflation would continue to remain low  • The benchmark 6.97% bond maturing in 2026 ended at | 101.60 against  the previous close of | 101.54  • The benchmark 6.97% 2026 bond yield was unchanged at 6.75%.  

Forex (US$/INR)  

• The rupee lost against the US$ in yesterday’s trade as overnight strength  in the US$ on rate hike prospects hurt risk sentiments along with profit  booking witnessed in domestic equities . Also, FIIs have been net sellers  in October against strong inflows in September  • The dollar index ended lower at 97.52, down 0.52%. US empire state  manufacturing activity unexpectedly shrank for October. While  probability of a December rate hike is high, market expectation is of a  gradual pace of rate hike amid mixed employment data still lower than  target US inflation data.  

US$/INR derivatives strategy: Sell October Contract  

• In the currency futures market, the  most traded dollar-rupee October  contract on the NSE ended at 66.98.  The October contract open interest  rose 1.56% from the previous day  • November contract open interest rose 2.56% from the previous day  • We expect the US dollar to meet supply pressure at higher levels. Utilise  upsides in the dollar to go short on the US$INR pair.  

Intra-day strategy


US$INR October futures contract (NSE View: Bearish on US$INR
Sell US$INR in the range of 67.05 - 67.15 Market Lot: US$1000
Target: 66.85 - 66.65 Stop Loss: 67.25
Support Resistance
S 1/ S2: 66.80/66.60 R 1/R 2:67.10/67.30








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