ICICI Direct expects USDINR to find resistance at higher levels. Utilise upsides in the pair to initiate short positions.
ICICI Direct's currency report on USDINR
The rupee extended sharp gains in the previous session registering a sixth session of consecutive gains. It ended at over a month high sustaining gains of almost 53-paise vs. the US$. Implied opening from forwards suggest it is likely to open strong today amid some cool-off in US-China trade war as well as a sharp up move in the Euro • The dollar index ended lower amid a sharp recovery in the Euro due to comments from ECB President Marion Draghi. Euro jumped from lows of 1.109 to 1.108. His comments regarding fiscal measures along with monetary measures lifted Euro as investors repriced the duration and actual quantum of easing measures. CNY also witnessed decent gains yesterday amid some relief steps taken by both the US as well as China.
Domestic benchmark 10-year yields ended slightly lower yesterday to 6.68%, amid caution ahead of crucial US Fed policy. Expectation of a rate cut in the backdrop of some recovery in US yields is keeping domestic yields in check • US treasury yields rose to 1.77% as investors remain cautious ahead of key policy outcomes. Also, fresh government and corporate offerings increased concerns on supply and weighed on bond prices.
Currency futures on NSE
The dollar-rupee September contract on the NSE was at 71.28 in the previous session. Open interest increased 1.45% in the previous session • We expect the US$INR to find resistance at higher levels. Utilise upsides in the pair to initiate short positions.
|US$INR September futures contract (NSE)||View: Bearish on US$INR|
|Sell US$ in the range of 71.37 -71.43||Market Lot: US$1000|
|Target: 71.15 / 71.05||Stop Loss: 71.58|
|S1/ S2: 71.15 / 71.00||R1/R2:71.40 / 71.60|
Coupon code: DIWALI. Offer valid till 10th November, 2019 .