ICICI Direct expects US$ to meet resistance at higher levels. Utilise upsides in the pair to go short on the US$INR pair.
ICICI Direct's currency report on USDINRDebt market
Government bonds fell for the first time in three days, as profit booking set in following a recent rally triggered by retail inflation easing to a five- year low • The benchmark 6.97% 2026 bond yield declined to 6.67% from 6.81% in the previous session due to increased hopes of a rate cut • Yield on the US 10-year rose to 2.33% from 2.34% in the previous session.Forex (US$/INR)
The rupee was little changed against the US currency, as US$ demand from crude oil and other commodity importers offset record gains in domestic equities • US$ declined sharply against major currencies as recent events surrounding the US President weighed on US$. Market participants seemed to exit US reflation trades as political concerns have taken centerstage over economic agenda. US$JPY fell sharply due to dent to risk-on sentiment while euro posted gains of near 1% due to weak US$.
In the currency futures market, the most traded dollar-rupee May contract on the NSE ended at 64.18. The May contract open interest declined 0.19% from the previous day • June contract open interest rose 12.01% in the last session • We expect the US$ to meet resistance at higher levels. Utilise upsides in the pair to go short on the US$INR pair.
|US$INR May futures contract (NSE)||View: Bearish on US$INR|
|Sell US$INR in the range of 64.30 - 64.40||Market Lot: US$1000|
|Target: 64.15/ 64.05||Stop Loss: 64.50|
|S1/ S2: 64.00 / 63.80||R1/R2:64.40 /64.60|
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