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Last Updated : Aug 30, 2019 01:11 PM IST | Source: Moneycontrol.com

Sell USDINR; target of 71.80 - 71.70: ICICI Direct

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

Representative image
Representative image

ICICI Direct's currency report on USDINR

Spot Currency

The rupee ended mildly lower yesterday by 2 paise, after getting support from near 72.10 levels. It is likely to open lower today tracking losses in Chinese Yuan as well as strength in the dollar. However, possibility of resumption of US-China trade talks could contain sharp losses • The US dollar index ended higher at 98.51 levels as the US President’s comments that US-China may initiate trade talks today improved risk sentiment. Initially, China indicated that it may not retaliate against the US President’s announcement of further higher tariff. This led the US President to indicate at possibility of US-China trade talks. CNY recovered from lows of 7.17 to currently 7.15. Recovery in CNY is positive for EM currencies.

Benchmark yield

Sovereign bond yields ended lower at 6.55% while overall it remains in a range. Investors await clarity on how the government is likely to utilise the fund received from the RBI • US 10-year yields rose to 1.49% as risk sentiment improved amid expectation of a US-China trade talks. A sharper cool-off in 10-year yields compared to near term treasuries is giving rise to the risk of a slowdown in the US economy.

Currency futures on NSE

The dollar-rupee September contract on the NSE was at 71.98 in the previous session. Open interest declined 1.19% 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.

Intra-day strategy 

US$INR September futures contract (NSE)View: Bearish on US$INR
Sell US$ in the range of 72.06 -72.10Market Lot: US$1000
Target: 71.80 / 71.70Stop Loss: 72.25
SupportResistance
S1/ S2: 71.95 / 71.75R1/R2:72.20 / 72.40
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 on Aug 30, 2019 10:43 am
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