Last Updated : Mar 06, 2018 11:19 AM IST | Source:

Sell USDINR; target of 65.00 - 64.94: ICICI Direct

ICICI Direct expects USDINR to meet resistance at higher levels. Utilise upsides in the pair to initiate short positions.

ICICI Direct's currency report on USDINR

Spot Currency

The rupee rose against the US$ , helped by the BJP’s victory in some state assembly elections and a sell - off in the US$ amid US President Donald Trump’s trade tariff threats • The US$ ended mildly higher major on the back of weakness in JPY against all currencies . The Euro and GBP gained against the US$ while the JPY witnessed profit booking from its previous sharp surge . We expect the US $ to remain under pressure as trade weakness hurts the economy and weighs on currency . Upcoming ECB monetary policy meeting assumes significance in the backdrop of the recent slide in inflation growth in the EU.

Benchmark yield

Sovereign bonds fell for a third consecutive session, with the benchmark note ending at a record low, as traders avoided taking positions amid persisting bearish sentiment • US 10 - year yields ended higher at 2 . 88 % amid rising inflation expectation ahead of March FOMC monetary policy meeting wherein a 25 bps rate hike is expected.

Currency futures on NSE The near month dollar - rupee March contract on the NSE was at 65.30. The March contract open interest increased 0.61 % from the previous day • We expect the US$INR to meet resistance at higher levels. Utilise upsides in the pair to initiate short positions.

Intra-day strategy

US$INR March futures contract (NSE) View: Bearish on US$INR
Sell US$INR in the range of 65.22 - 65.28 Market Lot: US$1000
Target: 65.00 / 64.94 Stop Loss: 65.41
Support Resistance
S 1/ S 2: 65.0 / 64.90 R 1/R 2:65.30 /65.40
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First Published on Mar 6, 2018 11:19 am
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