Morning breifing: Euro if slips below 1.1200, can be vulnerable to fall towards 1.1100-1.1000
The Dollar Index if sustains above 100.50 can head towards 101-102 before getting peaked out. Euro if slips below 1.12, can be vulnerable to fall towards 1.11-1.10. EURINR and EURJPY are trading within 97-95 and 160-164/65 region respectively. USDJPY can head towards 146-147 in the near term. AUDUSD has risen past 0.64 again and if sustained can test 0.65. The USDCNY is coming off and while below 7.26, pair can be vulnerable to fall back towards 7.22-7.21. Pound is trading near the lower end of its range of 1.35-1.32. The USDINR is closed today.
The US Treasury yields have risen sharply, breaking above earlier expected resistance levels and could continue to move up in the near term. The German yields have also moved up sharply and could remain bullish for the next few sessions. The 10Yr GoI fell sharply from 6.45% on Friday and while that holds, a decline to 6.35/30% looks possible. Bullishness can come in on a break past 6.45% only. Till then a sideways range can be possible for the yield between 6.30-6.45%.
Dow Jones can witness a rise to 42000-42500 as the US-China trade deal eases further. Dax looks bullish towards 24000-24500. Nifty as anticipated tested 23936 on Friday before rising back from there. Overall, we retain our view of seeing a rise towards 24500 in the coming sessions. Nikkei is likely to test 38000-38500 in the near term, while Shanghai can target 3400.
Brent and WTI are trading just below resistance levels, likely to stay within their respective ranges of $65–$58 and $62–$55 until clearer signals emerge from US-China trade talks. Gold shows a bearish bias despite a slight recovery, with potential to decline towards $3,200–$3,100. Silver remains range-bound between $34–$32, while Copper, after a sharp fall, stays bearish below $4.70 with downside potential to $4.40–$4.20. Natural gas, having broken resistance, may rise further towards $4.00–$4.20 in the near term.
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Author
Vikram Murarka
Kshitij Consultancy Services
Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.
