ICICI Direct expects USD to meet resistance at higher levels. Utilise upside in the pair to go short on the USDINR.
ICICI Direct's currency report on USDINR
Government bonds fell, as investors sold notes amid concerns the central bank may not cut interest rate s immediately after retail inflation accelerated to a five-month high in August • The GoI benchmark 6.79% 2027 bond yield increased to 6.59% from 6.55% in the previous session • Yield on the US 10-year yield increased to 2.19% from 2.17% in the previous session.Forex (US$/INR)
The rupee rose for the first time in three sessions against the dollar, as the dollar’s rally lost traction overnight amid caution ahead of US inflation data • The US$ gained sharply against major currencies amid short covering ahead of US August inflation data. Risk as well as safe haven currencies fell against US$ amid subsiding risk-off sentiment and lower-than- expected damage from Hurricane Irma. An uptick in US August retail inflation would further provide supports to the US$ as the recent deluge had seen huge short build up in the dollar index.Strategy
In the currency futures market, the most traded dollar-rupee September contract on the NSE ended at 64.09. The September contract open interest declined 5.78% from the previous day • October contract open interest increased 5.70% in the previous session • We expect the US$ to meet resistance at higher levels. Utilise upside in the pair to go short on the US$INR.
|US$INR September futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 64.18-64.28||Market Lot: US$1000|
|Target: 63.98 / 63.88||Stop Loss: 64.38|
|S1/ S2: 64.05 / 63.95||R1/R2:64.20 /64.30|
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