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Daily Snapshot

* After the announcement of RBI’s monetary policy, the rupee strengthened for a fifth straight session on Friday, closing 1 paise higher at 74.16

* The dollar climbed against major currencies, reaching four-month highs of 93, as market participants are expecting an earlier tapering of federal stimulus

* On Friday, the Nifty opened higher but faced resistance from 16300 Call writers as it closed with a loss of 0.30%. Looking at options data, the Nifty is likely to find resistance at 16300 as substantial Call writing is visible. On the downside, 16100 and 16000 Put witnessed noteworthy OI addition, which should act as support

* The Bank Nifty witnessed muted activity as it remained in a range and closed almost flat. According to options data, the Bank Nifty is expected to trade in a range between 35500 and 36000

* Foreign institutional investors (FII) turned net sellers to the tune of | 482 crore on August 5. They sold worth | 542 crore in the equity market and bought worth | 60 crore in the debt market

Rupee Outlook and Strategy

* By looking at US$INR options data, the US$INR has significant open interest at ATM strike of 74.25, suggesting a range bound movement of 74.20 and 74.50 levels in coming sessions

* The dollar-rupee August contract on the NSE was at | 74.28 in the last session. The open interest fell almost 0.60% for the August series

US$INR Strategy

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