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Sell USDINR; target of 64.18 - 64.08: 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.

July 20, 2017 / 10:45 AM IST

ICICI Direct's currency report on USDINR

Debt market

Government bond s rose, as hopes of a rate cut by the Monetary Policy Committee next month outweighed concerns on fresh supply of debt • The GoI benchmark 6. 79 % 2027 bond yield declined to 6.45 % from 6.46% in the previous session • Yield on the US 10 - year rose to 2. 27 % from 2.26 % in the previous session.

Forex (US$/INR)

The rupee posted mild gains on the back of a weak US$ against majors as well as recovery in domestic equities. Expectations of  an  interest rate  cut next month is  also  supporting rupee amid robut foreign inflows • The US$  fell with  the  dollar index testing 11 - months low as traders pull  back  their expectation of  the  US  P resident’s ability to rejuvenate reforms.  A fresh setback to health care bill amid weak CPI data has weighed on Fed’s interest rate hike trajectory. Euro and Japanese Yen continue to gain ahead of ECB and BoJ monetary policy review meetings tomorrow.

StrategyIn the currency futures market, the most traded dollar - rupee July contract on the NSE ended at 64.37. The  July contract open interest  declined 3.46 % from the previous day • August contract open interest  increased 7.28 % in the previous session • 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$INR July futures contract (NSE)View: Bearish on US$INR
Sell US$INR in the range of 64.44 - 64.54Market Lot: US$1000
Target: 64.18 / 64.08Stop Loss: 64.63
SupportResistance
S1/ S2: 64.40 / 64.20R1/R2:64.50 /64.70
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: Jul 20, 2017 10:45 am

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