ICICI Direct expects USDINR to find supports at lower levels. Utilise downsides in the pair to initiate long positions.
ICICI Direct's currency report on USDINR
Spot Currency
The rupee ended slightly higher yesterday. It ended a volatile session tracking strength in major currencies as well as domestic equities. It is expected to open lower today amid a steady US$ as well as weakness in Brazilian real and Chinese Yuan • The US $ was mildly lower against major currencies yesterday failing to gain on the back of higher US yields. The dollar reversed losses tracking strong consumer confidence reading. Also, record long positions in the US$ against currencies as well as safe haven assets like gold would support the US$.
Benchmark yield
Sovereign bonds witnessed profit booking as a surge in crude oil prices as well as a weakening rupee risked FII outflow pressures from domestic debt markets • US sovereign 10 - year bond yields rose even as the US$ was steady. Yields were supported on the back of higher US consumer confidence data as well as successful trade deal negotiation between the US and Mexico.
Currency futures on NSE
The dollar - rupee September contract on the NSE was at 70. 38 in the previous session. September contract open interest increased 32. 34 % in the previous session • 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 September futures contract (NSE) | View: Bullish on US$INR |
| Buy US$INR in the range of 70.28 -70.34 | Market Lot: US$1000 |
| Target: 70.54 / 70.62 | Stop Loss: 70.16 |
| Support | Resistance |
| S1/ S2: 70.30 / 70.10 | R1/R2:70.50 /70.65 |
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