Moneycontrol
Dec 04, 2017 11:31 AM IST | Source: Moneycontrol.com

Buy USDINR; target of 64.80 - 64.90: ICICI Direct

According to ICICI Direct expect USD to meet support at lower levels. Utilise the down side in the pair to go long on the USDINR.

(Representational image)
(Representational image)

ICICI Direct's currency report on USDINR


Debt market

The government bond market was closed on account of a holiday. Higher crude prices and fiscal defict concerns may keep yields sticky at higher levels The G o I benchmark 6.79 % 2027 bond yield remained firm at 7.06 % from  7.03 % in the previous session (Wednesday) Yield on  the  US 10 - y ear benchmark bond moved  lower to 2.3 6 %, as  tax  reform talks  was underway. Yields are likely to head higher from hereon.

Forex (USD/INR)

Trading in the rupee was closed on account of holiday for forex segment. The  one month NDF s are suggesting a stable start to the rupee from its previous close of 64.46 The dollar index held ground around 93. The dollar fell ahead of tax reform bill. However, as the bill has now been forwarded to the conference for final draft, we expect the dollar to trade stronger. A higher fiscal defict with the proposed tax amendment is likely to have elements of erstwhile “reflation trade, i.e. a stronger dollar, US  bond  yields and equities.

Strategy

In the currency futures market, the near month dollar - rupee December contract on the NSE ended at 64. 65. The December contract open interest decreased 8 % from the previous day January contract open interest rose 14 % in the previous session We expect the USD to meet support at lower levels. Utilise the down side in the pair to go long on the USDINR.


Intra-day strategy

USDINR December futures contract (NSE)View: Bullish on USDINR
Buy USDINR in the range of 64.35 - 64.45Market Lot: USD1000
Target: 64.80 / 64.90Stop Loss: 64.00
SupportResistance
S1/ S2: 64.20 / 64.00R1/R2:64.70 /64.90

 

 

 

 

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