ICICI Direct expects Open interest rose 18% in the previous session • Utilise downsides in the pair to initiate long positions.
ICICI Direct's currency report on USDINR
Spot Currency
Falling for the third consecutive session, the rupee on Tuesday slumped 43 paise to end at a 16-month low of 73.30 against the US dollar as investor sentiment remained fragile amid concerns over the impact of Coronavirus and rising crude oil prices • The Dollar Index fell 0.5% after the Fed lowered rates by 50 basis points, the first inter-meeting cut since the financial crisis. The market continued to price in more rate cuts in 2020.
Benchmark yield
The yield on the 10-year bond moved to 6.34 from 6.35 levels seen in its previous session. Bonds are set to rally after the central bank chief said there was room to cut rates if needed. The Federal Reserve’s 50 bp rate reduction is also expected to boost sentiments • US treasury prices soared following an emergency 50 bps rate cut by Federal Reserve on Tuesday with the 10-year yield at new record levels, bursting through 1%, a psychologically-significant point.
Currency futures on NSE
The dollar-rupee March contract on the NSE was at 73.51 in the previous session. Open interest rose 18% in the previous session • Utilise downsides in the pair to initiate long positions.
Intra-day strategy
| US$INR March futures contract (NSE) | View: Bullish on US$INR |
| Buy US$ in the range of 73.23-73.27 | Market Lot: US$1000 |
| Target: 73.65/ 73.90 | Stop Loss: 73.05 |
| Support | Resistance |
| Support: 73.05/72.90 | Resistance: 73.65/73.95 |
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