Buy USDINR; target of 70.40 - 70.48: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee ended mildly higher on Tuesday amid higher domestic equities and speculated intervention by RBI. However, it is expected to open on a weaker note tracking losses in non - deliverable forward (NDF) and also further weakness in the Chinese Yuan • The US $ moved slightly lower yesterday amid news that US - China may resume trade talks in late August after a tit - for - tat tariffs battle . However, the stand - off between the US and Turkey continues to stay escalated. Turkey has imposed tariffs on US imports in response to US sanctions.

Benchmark yield

Sovereign bonds were unchanged as investors remained cautious ahead of the national holiday as well as ongoing concerns in global financial markets that weighed on debt at higher levels • US sovereign 10 - year bond yields declined amid profit booking in US equities as well as concerns over a tiff between US and Turkey.

Currency futures on NSE

The dollar - rupee August contract on the NSE was at 69 . 99 in the previous session . August contract open interest increased 8 . 71 % 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$INR August futures contract (NSE)	View: Bullish on US$INR
Buy US$INR in the range of 70.14-70.20	Market Lot: US$1000
Target: 70.40 / 70.48	Stop Loss: 70.00
Support	Resistance
S1/ S2: 70.20 / 70.05	R1/R2:70.35 /70.50

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