ICICI Direct expects USDINR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions.
ICICI Direct's currency report on USDINR
The rupee ended the session with sharp gains at 70.72 ending higher by almost 45 paise against the US$ as improved risk sentiment as well as expectation of positive flows in domestic markets supported the rupee. It is expected to open on a further higher note today tracking global cues • The dollar retraced from its crucial resistance levels near 97 as a rebound in Euro and GBP weighed. Traders would be tracking developments on the Brexit front as any positive news on the same would provide a further flip to risk assets.
Sovereign treasury was unchanged at 7.36% as muted global yields and lower inflation have kept yields in a range. Domestic retail inflation fell to 2.05% in January 2019, which could provide further space for RBI to cut rates • US treasury yields rose to 2.69% while worsening global growth expectations could cap sharply rising yields. Incoming economic data remains important for further signals.
Currency futures on NSE
The dollar-rupee February contract on the NSE was at 70.87 in the previous session. February contract open interest increased 0.58% in the previous session • We expect the US$INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions.
|US$INR February futures contract (NSE)||View: Bearish on US$INR|
|Sell US$ in the range of 70.82 -70.88||Market Lot: US$1000|
|Target: 70.55 / 70.45||Stop Loss: 71.01|
|S1/ S2: 70.65 / 70.5||R1/R2:70.90 /71.05|