Oct 09, 2017 11:20 AM IST | Source:

Sell USDINR; target of 65.45 - 65.35: ICICI Direct

ICICI Direct expects USD to meet supply pressure at higher levels. Utilise up side in the pair to go short on the USDINR.

ICICI Direct's currency report on USDINR

Debt market

Government bonds fell sharply this week, as investors sold notes after  the country’s rate - setting Monetary Policy Committee’s latest meeting  suggested little chance of near - term rate cuts • The  GoI benchmark  6.79 % 2027 bond yield rose to 6.76 % from 6.73% in the previous session • Yield on  the  US 10 - year yield  rose to 2.36 % from 2.35 % in  the  previous  session.

Forex (US$/INR)

The rupee fell for a fourth straight week against the US$, as a string of solid US economic data and tax cut plans amid growing bets o n a third Federal Reserve rate increase this year boosted US$ prospects • The US$ fell mildly against major currencies a s sharply lower - than - expected September employment data weighed on rate hike sentiments. US September payrolls contracted by 33000 rolls against expectation of addition of 80000 rolls. However, wage growth was higher at 2.9% against expectation of 2.5%. Lower employment data along with a change in the Fed chair would keep the US$ in focus in the near term.  The British pound continue d to slide as the UK Prime Minister is seen losing support amid Brexit negotiations.

Strategy In the currency futures market, the near month dollar - rupee October contract on the NSE ended at 65.55. The October contract open interest  increased 8.30 % from the previous day • November contract open interest  increased 1.42 % in the  previous session • We expect  the US$ to meet supply pressure at higher levels. Utilise up side in the pair to go short on the US$INR.

Intra-day strategy

US$INR October futures contract (NSE) View: Bearish on US$INR
Sell US$INR in the range of 65.60-65.70 Market Lot: US$1000
Target: 65.45 / 65.35 Stop Loss: 65.80
Support Resistance
S1/ S2: 65.45 / 65.35 R1/R2:65.60 /65.80
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

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