Moneycontrol
Last Updated : Dec 12, 2017 11:03 AM IST | Source: Moneycontrol.com

Buy USDINR; target of 64.75 - 64.85: ICICI Direct

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 USDINR

Debt market

Government  bonds plunged for a third session, with the benchmark yield  rising to a 16 - month high, as traders sold notes on concerns about a  sharp spike in November retail inflation • The  GoI benchmark  6.79 % 2027 bond  yield gained 9 bps to 7.18 % from 7.09 % in the previous session • Yield on the US 10 - year benchmark bond rose to 2.39 % from 2.38 % as the FOMC monetary policy meeting approaches.

Forex (US$/INR)

The rupee rose to a near two - week high against the US$, as domestic  equities rose, boosting optimism about foreign fund inflows, while  traders remain wary ahead of  a  crucial state election outcome and a Fed monetary policy meeting • The  dollar index  ended slightly lower as investors remain on  the sidelines ahead of  the  two - day FOMC monetary policy meeting , which  starts today.  The US Federal Reserve is widely expected to raise interest rates by 25 bps. However, investors await details on the Fed’s inflation and growth outlook to determine the quantum of rate hikes for 2018. The Japanese Yen could see further declines on a spike in the US$ while the Euro is expected to remain in a range.

Strategy In the currency futures market, the near month dollar - rupee December contract on the NSE was at 64.47. The December contract open interest increased 13.12 % from the previous day • January contract US$INR ended at 64.67. Open interest increased 0.47 % in the previous session • We expect the US$ to find support at lower levels. Utilise the down side in the pair to go long on the US$INR.

Intra-day strategy

US$INR December futures contract (NSE View: Bullish on US$INR
Buy US$INR in the range of 64.42 - 64.48 Market Lot: US$1000
Target: 64.75 / 64.85 Stop Loss: 64.30
Support Resistance
S1/ S2: 64.40 / 64.25 R1/R2:64.70 /64.90
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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First Published on Dec 12, 2017 11:03 am
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