Buy USDINR; target of 68.30 - 68.40: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee ended sharply lower on Friday amid a domestic political slugfest over the Karnataka state election outcome as well as broad strength in the US$ in the backdrop of rising crude oil prices • The US$ ended on a higher note as an improved inflation outlook as well as growth prospects continued to spur the US$ against major as well emerging market currencies. MSCI emerging currency index slid 1.3 % as deficit concerns surfaced over rising global yields as well as higher oil prices. The US $ index is approaching its key resistance zone of 94 - 95, which may provide respite to emerging market currencies.

Benchmark yield  

Sovereign bonds ended Friday on a higher note as domestic yields were slightly lower following global cues. However, gains would remain limited in the backdrop of strength in crude oil prices • US 10 - year yields declined on Friday from its recent solid gains. However, we expect yields to remain elevated over rising oil prices as well as a better US economic outlook.

Currency futures on NSE The near - month dollar - rupee May contract on the NSE was at 68.08 in the previous session. The May contract open interest increased 0.12 % in previous day • We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.

Intra-day strategy

US$INR May futures contract (NSE)	View: Bullish on US$INR
Buy US$INR in the range of 67.90 - 67.96	Market Lot: US$1000
Target: 68.30/ 68.40	Stop Loss: 67.79
Support	Resistance
S1/ S2: 67.95 / 67.85	R1/R2:68.10 /68.30

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