Morning breifing: The Euro needs to break past 1.1300 to rise further
The Dollar Index has support near 100.50-100.00 region, 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 is stuck within 96-95 region for now. EURJPY and USDJPY can soon test 162.5 and 145/44 respectively. Thereafter, whether the fall extends further or not will have to be seen. AUDUSD can trade within the range of 0.650-0.635 for a while. The USDCNY on a confirmed break below 7.20 can test 7.15 on the downside. The upside could be capped at 7.23/24. Pound has resistance just above current levels and while below it, the fall can get extended to 1.31. The USDINR tested 85.73 before cooling down. The fall can get extended to 85.25-85.00 levels in the near term.
The US Treasury and the German yields have declined sharply. The resistance on the Treasury yields has held very well. They can fall more in the coming days. The German yields on the other hand have support near current levels. They have to sustain above this support to keep the bullish view alive. We will have to wait and watch.
Dow Jones holds well above support at 41800 and can continue to rise towards 43000. Dax is also bullish towards 24000-24500. Selling pressure is seen across the Asia-Pac equity indices (except Indian equities) as Nikkei and Shanghai continue to decline. The indices could get some support near 37500 and 3350 respectively. Nifty has risen well, entering above the 25000 level. While above 25000, an eventual rise to 25500-26000 could be seen in the coming weeks.
Brent and WTI have weakened, slipping below key levels and are likely to trade in lower ranges for now. Gold bounced back after testing support at $3,123.30 and could rise towards $3,300–$3,350 if the support holds. Silver remains range-bound between $34–$32. Copper faces resistance and may decline towards $4.40–$4.20. Natural gas continues to fall and could test support near $3.10–$3.00 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.
