Morning briefing: Euro eyes break above 1.1400 for further gains
The German parliament elected conservative leader Friedrich Merz as chancellor. The Dollar Index continues to hold the range of 99.0-100.5. A confirmed fall below 99 can open the doors for 98-96. The Euro has risen a bit but still needs to break past 1.14 to head towards 1.16-1.18. EURINR has risen past 96 and a confirmed break past 96.50 can take it higher towards 98-99 as well. EURJPY and USDJPY are trading lower within their range of 164-160 and 145-140 respectively. AUDUSD has risen well and if sustained, can test 0655-0.66 in the near term. The USDCNY can soon test 7.20 on the downside. Pound can trade within 1.32-1.35 region for a while. USDINR below 84.75, can hold the range of 84.75-84.00 for a while. Watch out for the FOMC meeting scheduled today.
The US Treasury yields have dipped slightly. Failure to rise back immediately from here can drag them down in the coming days. The outcome of the US Federal Reserve meeting tonight will need a close watch. The Fed is likely to keep the rates unchanged. However, it will be important to see if Jerome Powell is saying anything on the impact of tariffs. The German yields are poised at their key resistances. A reversal from here will keep the broader downtrend intact. The yields can fall in that case. The 10Yr GoI remains stuck in its narrow range.
Dow Jones has fallen and can head to 40000 on a fall below 40700 while the Dax still signals some strength as it bounced from the intra-day low of 22861. We keep intact the target of 24500-24800 on a break above 23500 in the coming sessons.Nifty could decline on news of overnight attack on Pakistan by India. However, we may expect immediate downside to be limited to 23900. Nikkei has dipped as resistance at 37000 holds well. A dip to 36500-36000 could be possible. Shanghai has risen sharply and can head towards resistance at 3400.
Brent and WTI have risen unexpectedly but face key resistance levels that could cap gains and trigger a pullback in the coming weeks. Gold surged as expected but needs to sustain above $3,400 to advance further; otherwise, it risks a decline. Silver remains bullish above $33.00, targeting $34.00–$34.50. Copper continues its upward momentum toward $4.80–$4.90, while Natural Gas holds support at $3.47, keeping the outlook positive for a rise to $3.80–$4.00.
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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.
