Monthly Forex & Commodities Outlook - October 2020 - ICICI Securities

Positional Recommendations...

Sell US$INR

Sell US$INR October future around 74.00-74.10, Target: 72.90, Stop loss: 74.75

Rationale

We expect the rupee to find a hurdle around current levels of 74. It is not expected to depreciate further from here onwards. In such a scenario, any rise in US$INR would be a shorting opportunity. Despite recent FII outflows in domestic equities, the rupee has shown significant resilience. We expect renewed weakness in the dollar due to expected stimulus and near zero interest rates for the longer term, which should keep further pressure on the pair. US$INR futures have an immediate hurdle at 74.70 level. As long as it sustains below this level, we will see this appreciation trend continuing in the near term towards the next major support around 72.90 level.

Buy Gold

Buy Gold mini (GOLDMI) November future around | 49950-50200, Target: | 54000, Stop loss: | 48300

Rationale

We believe gold prices will benefit as a perceived hedge against inflation and currency debasement triggered by the money printing by global central banks to ease the economic blow from the pandemic. Hence, we expect gold prices to bounce from current levels towards immediate target placed around | 54000.

For details, click on the link below: https://www.icicidirect.com/mailimages/CommoditiesOutlook.pdf

Source : Equity Bulls

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