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Last Updated : Apr 06, 2017 10:50 AM IST | Source: Moneycontrol.com

Buy USDINR; target of 65.35 - 65.55: ICICI Direct

ICICI Direct expects USD to find supports at lower levels. Utilise down sides in the pair to go long on the USDINR pair.

ICICI Direct's currency report on USDINR

Debt market

Government bonds fell a s investors defer purchases ahead of the Monetary Policy Committee’s interest rate decision due today. Although  the consensus  is for no change in interest rates,  the  liquidity stance  would provide clues as  the  banking  system remain s awash with liquidity • The benchmark  6.97 % 202 6 bond  yield  remain  unchanged at 6.65 % in the  previous  session • Yield on  the  US 10 - y ear fell to 2. 3 4 % from 2. 3 6 % in the previous session

Forex (US$/INR)

The rupee rose against the dollar, as foreign banks sold the US$, helping erase losses caused by caution ahead of the domestic monetary policy decision today. Traders would be awaiting the  RBI ’s stance on excess  liquidity in the system • The  US dollar was almost unchanged against major currencies post US  Fed minutes. Officials have toned down the stance for a gradual reduction in Fed balance sheet against an abrupt halt. The apanese Yen gained post Fed minutes . We expect the pair to see some further selling as the pair remains highly immune to the US rate hike trajectory

US$/INR derivatives strategyIn the currency futures market, the most traded dollar - rupee April contract on the NSE ended at 65.08. The  April contract open interest  fell 7.04 % from the previous day • May contract open interest  rose 13.96 % from the previous day • We expect  the US$ to find supports at lower levels. Utilise down sides in the pair to go long on the US$INR pair.

Intra-day strategy


US$INR April futures contract (NSE)View: Bullish on US$INR
Buy US$INR in the range of 65.05 - 65.15Market Lot: US$1000
Target: 65.35 / 65.55Stop Loss: 64.98
S1/ S2: 65.05 / 64.90R1/R2:65.33 /65.50

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First Published on Apr 6, 2017 10:50 am