Buy USDINR; target of 64.95 – 65.05: ICICI Direct

ICICI Direct’s currency report on USDINR

 

Spot Currency

The rupee a fell to a three-month low against the dollar, as appetite for risk assets took a beating amid a recovery in the USD while sentiments were also hurt by domestic banking sector woes USD gained sharply against major currencies as well as emerging currencies yesterday as rising US yields supported the dollar. The US is set to raise record amount of debt while yesterday’s auction saw a rise in debt yield. Risk of inflation has raised concerns on faster rate hikes in the US, which is supporting the USD

Benchmark yield

Sovereign bonds slumped yesterday with the benchmark paper ending at a record low, as banks continued to sell papers amid higher US treasury yields US 10-year yields ended rose 2.89% vs. previously 2.87%, ahead of US Fed meeting minutes today

Currency futures on NSE

The near month dollar-rupee February contract on the NSE was at 64.84. The February contract open interest increased 35.51% from the previous day We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions moneycontrol

Intra-day strategy

USDINR Feb futures contract (NSE) View: Bearish on USDINR
Buy USDINR in the range of 64.70 – 64.76 Market Lot: USD 1000
Target: 64.95 / 65.05 Stop Loss: 64.58
Support Resistance
S 1/ S 2: 64.80 / 64.60 R 1/R 2:64.95 /65.05