Morning briefing: Will EUR/USD hit the 1.1300 target in the near-term?
The Dollar Index and Euro are moving as anticipated. If the ongoing movement persists in both then our targets of 100-99 and 1.13 respectively can be met soon. EURINR has risen and while above 95, it can extend to 96 as well. EURJPY continues to trade within 160-165 region. Only a decisive break past 165 can take it higher towards 166-167. USDJPY below 149, can get dragged towards 146-145 in the coming sessions. AUDUSD needs to rise past 0.65 to head towards 0.66 and higher. Else range of 0.635-0.650 can persist for a while. The USDCNY has risen again but upside could be capped at 7.23/24. Pound faces immediate resistance just above current levels. Need to see whether it hold or the rise extends further. The USDINR above 85 can rise towards86 in the near term.
The US Treasury and the German yields have risen sharply as expected. The US yields could face near term resistances above current levels which if holds can lead to a corrective fall in the near term while the German yields can continue to move higher. The 10Yr GoI fell below our expected 6.35% but could get some support at 6.30% from where a bounce can be expected. Failure to hold above 6.30% can make it vulnerable to test 6.25/20%.
Dow Jones dipped after a lower-than-expected US CPI release for Apr-25, but while above 41500, the index can remain positive for an eventual rise to 43000+ levels. Dax has risen and could target 24000-24500 soon. Asian equities are trading lower. Nifty may see a bounce back towards 25000 after a sharp decline seen yesterday. Nikkei and Shanghai have dipped too. Nikkei can rise while above 37500/38000 to target 39000, while Shanghai can decline towards 3300 while below immediate resistance at 3400.
Brent and WTI have broken key resistance levels and look poised to rise towards $68–$70 and $64–$66 respectively, supported by easing US-China trade tensions and a weaker dollar boosting demand sentiment. Gold is holding above $3,200 with support at $3,150, suggesting a possible rebound to $3,300–$3,350. Silver remains range-bound between $34–$32. Copper has bounced unexpectedly but may stay within $4.80–$4.60 before eventually falling. Natural gas is under pressure, with support at $3.50–$3.40, and could range between $3.80–$3.40 before rising towards $4.00–$4.20.
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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.
