Morning breifing: The Euro needs to break past 1.1300 to rise further
The Dollar Index on a confirmed break below 100 can extend the fall to 99-96. Immediate upside is capped at 101.50-102.00. The Euro needs to break past 1.13 to rise further. Else it can be vulnerable to fall back. EURINR can trade within 96.5-95.0 region for now. EURJPY below 165 can fall towards 163.0-162.5. USDJPY is coming off as anticipated and can soon test 146-145 in the coming sessions. AUDUSD can trade within the range of 0.650-0.635 for a while. The USDCNY has risen well but upside could be capped at 7.23/24. Pound held the resistance near 1.3360 quite well and while below it, the fall can get extended to 1.31-1.30. The USDINR has the scope to rise towards 85.75-86.0 in the near term. IN Trade Balance, US PPI, Retail Sales, Philifed Index, Industrial Production and Capacity Utilization data releases are scheduled today.
The US Treasury yields are coming close to their key resistance. They can gain momentum if they manage to break the upcoming resistance. That in turn will clear the way for more rise going forward. Else the yields can fall back again. The German yields continue to rise. The bullish view is intact, and the yields can rise further in the coming days. The 10Yr GoI has declined below its key support. While it sustains lower, the outlook is bearish to see more fall.
Dow Jones and Dax have dipped but while above supports near 41800 and 23400/23300, view is bullish for a rise towards 43000+ and 24000-24500. Nifty has been stable and while above 24400/500, view is bullish for a rise to 25500/26000. Profit taking is seen on Nikkei and Shanghai. Both seem to be holding well below their interim resistances near 38500 and 3400. It would be important to see if the indices manage to break above these interim resistance levels and move higher. Else they can continue to decline in the near term.
Crude prices have dipped due to rise in EIA crude inventories but are expected to rise in the near term before pulling back. Gold is testing support and may rebound unless it breaks below $3,150. Silver remains range-bound between $34–$32. Copper faces resistance and could fall further to $4.20. Natural Gas holds above support, likely staying in a $3.40–$3.80 range before a possible rise to $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.
