ICICI Direct expects USD to find support at lower levels. Utilise the down side in the pair to go long on the USDINR.
ICICI Direct's currency report on USDINRDebt market
Government bonds fell for a second session as higher crude oil prices raised the possibility of inflation gaining pace over the coming months • The GoI benchmark 6.79 % 202 7 bond yield rose to 7. 3 7 % from 7. 34 % in the previous session • Yield on the US 10 - year benchmark bond rose to 2. 55 % from 2.48% in the previous session.Forex (US$/INR)
The rupee fell for a second consecutive session against the US$ in a choppy session as oil - related concerns out weighed likely foreign fund inflows in the backdrop of a strong dollar against major currencies • The US$ is on the revival path for a few sessions due to sharp gains against the Euro . However, some of this w as countered by losses against JPY. Lower quantum of bond buying by BoJ has raised expectations of whether BoJ has quietly initiated lowering QE. The Italian election and Catalonia secession risks are weighing on the Euro.Strategy In the currency futures market, the near month dollar - rupee January contract on the NSE was at 63. 85. The January contract open interest declined 4.08 % from the previous day • February contract US$INR ended at 64.05. Open interest increased 5. 48 % in the previous session • We expect the US$ to find support at lower levels. Utilise the down side in the pair to go long on the US$INR.
|US$INR January futures contract (NSE)||View: Bullish on US$INR|
|Buy US$INR in the range of 63.70 - 63.78||Market Lot: US$1000|
|Target: 63.95 / 64.05||Stop Loss: 63.59|
|S1/ S2: 63.75 / 63.65||R1/R2:63.90 /64.10|