May 19, 2017 11:42 AM IST | Source:

Buy USDINR; target of 65.05 - 65.10: ICICI Direct

ICICI Direct expects US$ to find supports at lower levels. Utilise downsides in the pair to go long on the US$INR pair.

ICICI Direct's currency report on USDINR

Debt market  

Government bonds ended little changed in lacklustre trade, as investors deferred purchases ahead of a weekly debt auction. Also, political  turmoil in the US could support bonds as yields remain on the backfoot  • The benchmark 6.97% 2026 bond yield was almost unchanged at 6.68%  in the previous session  • Yield on the US 10-year rose mildly  to 2.23% from 2.22% in the previous  session.

Forex (US$/INR)  

The rupee marked its biggest single-day fall in nearly 21 months against  US$, as political unrest in the US involving President Donald Trump  dented investors’ appetite for risk assets  • The US$ recovered slightly against major currencies due to profit  booking and recovery in yields. Even though US$ weakened against majors, it strengthened against most emerging currencies as recent political turmoil in the US has weighed on risk-on sentiment. We expect the US$ index to find supports above 96.50 level in the near term.

US$/INR derivatives strategy  
In the currency futures market, the most traded dollar-rupee May contract on the NSE ended at 64.93. The May contract open interest declined 14.42% from the previous day • June contract open interest increased by 5.19% in the last session • We expect the US$ to find supports at lower levels. Utilise downsides in the pair to go long on the US$INR pair.

Intra-day strategy

US$INR May futures contract (NSE)View: Bullish on US$INR
Buy US$INR in the range of 64.60 - 64.70Market Lot: US$1000
Target: 65.05 / 65.10Stop Loss: 64.50
S1/ S2: 64.60 / 64.40R1/R2:64.90 /65.10

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

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