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Jan 03, 2018 10:41 AM IST | Source: Moneycontrol.com

Sell USDINR; target of 63.60 - 63.50: ICICI Direct

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

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ICICI Direct's currency report on USDINR


Debt market

Government bonds fell for a second day as investors sold notes after a surge in crude oil prices triggered fears the inflation rate is likely to stay above the central bank’s target • The GoI benchmark 6. 79 % 2027 bond yield rose to 7. 3 9 % from 7. 34 % in the previous session • Yield on the US 10 - year benchmark bond rose to 2.4 6 % from 2.41% in the previous session.

Forex (US$/INR)

The rupee rose for a fourth straight session as gains due to US$  weakness outweighed losses triggered by oil - related outflow concerns • The  US$ fell below 92 - level as weakness against major as well as  emerging currencies  are weighing on  the  US$. Reversal in reflation trade in 2017, coupled with an initial setback to US President’s reforms agenda led to profit booking. The Euro continue d its unabated rise against the US$ as well as JPY as relative higher growth and QE pullback expectations is supporting common currency.

Strategy
In the currency futures market, the near month dollar - rupee January contract on the NSE was at 63.67 . The January contract open interest increased 9.88 % from the previous day • February contract US$INR ended at 63.87. Open interest increased 9.60 % in the previous session • We expect the US$ to meet supply pressure at higher levels. Utilise the up side in the pair to go short on the US$INR.

Intra-day strategy

US$INR January futures contract (NSE)View: Bearish on US$INR
Sell US$INR in the range of 63.72 - 63.78Market Lot: US$1000
Target: 63.60 / 63.50Stop Loss: 63.91
SupportResistance
S1/ S2: 63.60 / 63.40R1/R2:63.75 /63.95

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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