Buy USDINR; target of 71.35 - 71.45: ICICI Direct

ICICI Direct's currency report on USDINR

Spot Currency

The rupee ended slightly higher against the US$. However, it pared most of its opening gains as caution and nervousness prevailed ahead of interim Budget today. The rupee is expected to open higher today while today's interim Budget will provide cues for rupee • The dollar recouped some of its previous session's losses as Euro and British pound came under profit booking. The Fed reiterated its bearish stance in January monetary policy meeting, which should weigh on the dollar in the near term. GBP remains on the edge as Brexit uncertainty has only increased even as the UK maintains it will exit Euro bloc by March 29, 2019.

Benchmark yield

Sovereign treasury yields declined yesterday amid cooling off in global yields and also expectation of lower than expected fiscal slippage • US treasury yields extended declines as the Fed maintained a dovish stance as expected. Going forward, we expect further pressure on US yields as rate hike expectations have become almost nil for 2019.

Currency futures on NSE

The dollar - rupee February contract on the NSE was at 71. 29 in the previous session. February contract open interest declined 0. 92 % 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$INR February futures contract (NSE)	View: Bullish on US$INR
Buy US$ in the range of 71.00 -71.08	Market Lot: US$1000
Target: 71.35 / 71.45	Stop Loss: 70.89
Support	Resistance
S1/ S2: 71.10 / 70.95	R1/R2:71.25 /71.40

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