Sell USDINR; target of 64.75 - 64.65: ICICI Direct

ICICI Direct's currency report on USDINR

Debt market

Government bonds fell after sharp gains yesterday, as investors sold notes in the absence of fresh triggers • The GoI benchmark 6.79 % 2027 bond yield rose mildly to 6.90 % from 6.89 % in the previous session • Yield on the US 10 - year benchmark bond declined to 2.36 % from 2.37 % in the previous session.

Forex (US$/INR)

The  rupee rose to a more - than - two - week high against the US$, as  a  decline in bench mark yields and mild gains in domestic equities  supported  the  rupee • The  US$  fell against  the  JPY as  the  US  Fed  chair warned against  tightening too quickly , which could risk  the  Fed’s stated target of  achieving 2% inflation. Political turmoil in Germany continue d to weigh on a common currency. The market is awaiting the Fed’s December monetary policy wherein a rate hike is expected. Also, traders are awaiting the Fed’s outlook for cues on further pace of rate hikes.

Strategy
In the currency futures market, the near month dollar - rupee November contract on the NSE ended at 64.93. The November contract open  interest  declined  8.04 % from the previous day • December contract open interest  increased 5.98 % in the  previous session • We expect  the US$ to meet resistance at higher levels. Utilise the up side in the  pair to go short on the US$INR.

Intra-day strategy

US$INR November futures contract (NSE)	View: Bearish on US$INR
Sell US$INR in the range of 64.95 - 65.05	Market Lot: US$1000
Target: 64.75 / 64.65	Stop Loss: 65.15
Support	Resistance
S 1/ S 2: 64.90 / 64.70	R 1/R 2:65.20 /65.40

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