Moneycontrol
Nov 15, 2017 11:33 AM IST | Source: Moneycontrol.com

Sell USDINR; target of 65.30 - 65.20: ICICI Direct

ICICI Direct expects USD to meet supply pressure at higher levels. Utilise up side in the pair to go short on the USDINR.

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ICICI Direct's currency report on USDINR

Debt market

Government bonds fell for a third straight session, with the benchmark yield spiking to its highest in 14 months, as market participants cut positions after inflation accelerated to a seven - month high in October • The GoI benchmark 6.79 % 2027 bond yield rose to 7.05 % from 6.97 % in the previous session • Yield on the US 10 - year benchmark bond declined to 2.37 % from 2.41 % in the previous session.

Forex (US$/INR)

The  rupee swung between gains and losses before ending unchanged  against the  US$ ,  as fears of foreign fund outlflows were offset by weak  US$ against major currencies • The  US$  posted losses against major currencies as  the  Euro and JPY  rose sharply even as rate hike setiment remain weak. The Euro rallied posting gains of over 1% leading to losses of almost 0.70% in the dollar index. On the other hand, emerging currencies are weighed by rising crude oil prices coupled with firm commodity prices, which is raising concerns over higher inflation prospects.

Strategy

In the currency futures market, the near month dollar - rupee November contract on the NSE ended at 65.55. The  November contract open interest  increased 7.77 % from the previous day • December contract open interest  rose 5.98 % in the  previous session • We expect  the US$ to meet supply pressure at higher levels. Utilise up side in the pair to go short on the US$INR.

Intra-day strategy
US$INR November futures contract (NSE)View: Bearish on US$INR
Sell US$INR in the range of 65.50 - 65.60Market Lot: US$1000
Target: 65.30 / 65.20Stop Loss: 65.70
SupportResistance
S 1/ S 2: 65.40 / 65.25R 1/R 2:65.55 /65.65

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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