Buy USDINR; target of 68.85 - 68.90: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency 

The rupee fell against the US$ owing to inherent strength in the dollar during the Asian session coupled with domestic concerns like agricultural commodities MSP hike, no confidence motion, etc • US$ ended higher against major currencies owing to gains against GBP while JPY ended mildly higher retracing from lows near ¥ 113 / $ . The dollar index is near the crucial 95 - level. Strength from current levels would weigh on emerging currencies including rupee.

Benchmark yield  

Sovereign bond yields remained unchanged in the previous session even as central bank’s OMO purchase supported bonds. Domestic debt also benefitted from the recent slump in crude oil prices • US bonds declined mildly as yields rose tracking relatively hawkish comments from Fed chairperson Jerome Powell. Investors would track US inflation levels in the backdrop of expectation of two more interest rate hike in 2018.

Currency futures on NSE The dollar - rupee July contract on the NSE was at 68. 68 in the previous session. July contract open interest increased 5. 10 % in the 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$INR July futures contract (NSE)	View: Bullish on US$INR
Buy US$INR in the range of 68.60 - 68.66	Market Lot: US$1000
Target: 68.85 / 68.90	Stop Loss: 68.48
Support	Resistance
S1/ S2: 68.60 / 68.45	R1/R2:68.75 /68.95

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