Apr 19, 2017 11:13 AM IST | Source:

Sell USDINR; target of 64.55 : ICICI Direct

ICICI Direct expects USD to meet supply pressure at higher levels. Utilise up sides in the pair to go short on the USDINR pair.

ICICI Direct's currency report on USDINR

Debt market
Government bonds ended  little changed after the Indian Meteorological Department (IMD) predicted southwest monsoon rainfall  would be  normal this year The benchmark  6.97 % 202 6 bond  yield  rose to 6. 8 6 % from 6. 8 5 % in the previous session Yield on the US 10 - y ear fell sharply to 2.17 % from 2.25% in the previous session

Forex (US$/INR)

The rupee fell for a second day against the dollar in  range bound trading,  dragged by weak domestic equities and US$ purchases by state - run  banks for their importer clients The  dollar index fell sharply against major currencies as sharp gains  in  the  GBP and euro weighed on  the  US$.  The GBP gained almost 2.20% as the UK Prime Minister has called for snap general elections in June .The euro also gained tracking political development s in France. We expect the US$ to remain subdued as US interest rate hike prospects could take a backseat amid a host of geo - political uncertainties.

US$ US$/INR derivatives strategy
In the currency futures market, the most traded dollar - rupee April contract on the NSE ended at 64. 60. The April contract open interest fell 6. 6 5 % from the previous day May contract open interest rose 3.59 % from the previous day We expect the US $ to meet supply pressure at higher levels. Utilise up sides in the pair to go short on the US$INR pair.

Intra-day strategy

US$INR April futures contract (NSE)View: Bearish on US$INR
Sell US$INR in the range of 64.80 - 64.90Market Lot: US$1000
Target: 64.65/ 64.55Stop Loss: 65.00
S1/ S2: 64.60 / 64.40R1/R2:64.80 /65.00

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