Apr 18, 2017 11:56 AM IST | Source:

Buy USDINR; target of 64.75: ICICI Direct

ICICI Direct expects USD to find support at lower levels. Utilise down sides in the pair to go long on the USDINR pair

ICICI Direct's currency report on US$INR

Debt market
Government bonds ended lower for a second day, after the central bank sold long - duration treasury bills and announced three more such auctions over the next four weeks to absorb excess cash from banks The benchmark 6.97 % 202 6 bond yield  rose to 6. 8 5 % from 6. 82 % in the previous session Yield on the US10 - year rose mildly to 2.2 5 % in the previous session

Forex (US$/INR)

The rupee pared early gains to end lower against the US$, as dollar purchases by state - run banks and weak domestic equities wiped out  gains stemmed from weak US$ The US$  index fell further against major currencies as gains over JPY  were offset by losses against  the  Euro and GBP. US$JPY pair saw some  profit booking as risk aversion subsided following lower offensive from  the  US over North Korea. GBP and Euro gained as a far right anti - Euro French political party saw some of its support dipping recently

US$ US$/INR derivatives strategy
In the currency futures market, the most traded dollar - rupee April contract on the NSE ended at 6 4. 60 .The April contract open interest fell 3.5 5 % from the previous day May contract open interest rose 0. 1 4 % from the previous day We expect the US $ to find support at lower levels. Utilise down sides in the pair to go long on the US$INR pair

Intra-day strategy

US$INR April futures contract (NSE)View: Bullish on US$INR
Buy US$INR in the range of 64.35 - 64.45Market Lot: US$1000
Target: 64.75/ 64.85Stop Loss: 64.25
S1/ S2: 64.50 / 64.30R1/R2:64.80 /65.00

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