Morning briefing: Euro poised for further gains towards 1.1800
|The European Union and the U.S. are moving towards a trade agreement that could include a 15% U.S. baseline tariff on EU goods. The Dollar Index continues to fall further within its 99-96 range. The downside is expected to be limited to 96. The Euro and EURINR are headed towards 1.18/19 and 102 or slightly higher respectively. EURJPY is trading within the 171-173 region. USDJPY can test the support near 145-144 if the ongoing fall extends further. USDCNY is trading near the lower end of its 7.20-7.15 range. Watch price action closely to see whether the support holds or not. The Aussie and Pound have immediate resistance at 0.66 and 1.36 respectively, break past which can bring 0.67 and 1.37 and higher levels into picture. USDINR below 86.50/60 is likely to witness a corrective fall towards 86.25-85.75 in the coming weeks. Watch out for the ECB meeting scheduled today.
The US Treasury yields have risen back from their support. A follow-through rise from here will keep our bullish view intact and can take the yields higher. The German yields have risen back well above their support. If this bounce sustains, the danger of a fall will be avoided. In turn, it will keep alive our bullish view. The ECB meeting outcome can play a key role in setting the direction for the yields. The 10Yr GoI has dipped and hovers above the lower end of the range. The narrow sideways range remains intact, and it can bounce within it.
All the major stock indices look strong and have risen significantly. The Dow has risen past the 45000 resistance mark and could be bullish towards 46000 while Dax can rise to 24500 in the near term. Nifty has risen to retest resistance near 25250 which needs to break for a rally towards 25600+ levels. Nikkei has soared after Trump announced the largest ever deal of a $550B with Japan and the agreement of 15% reciprocal tariffs by Japan against the earlier 25%. Nikkei could be headed towards 42000-42500 soon. Shanghai is stable below 3600. A rise to 3650 can be soon seen before any corrections set in.
Crude prices are falling as expected, with further downside likely unless key resistance levels are breached. Gold has reversed from resistance and could turn bearish if it breaks below $3,350, targeting $3,250–$3,200. Silver may dip to $38.5 before a possible rebound. Copper remains bullish towards $6.00, while Natural Gas has broken support and may fall further towards $2.90.
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