Dollar Index dips a bit but can remain above 105

Vikram Murarka Kshitij Consultancy Services

Dollar Index has dipped a bit but can remain above 105 which can keep upside intact at 1.03 for Euro and lad to a fall back towards 1.01. EURJPY can test 137/138 before falling back to 135/134. Aussie and Pound are likely to remain ranged within 0.6880-0.7050 and 1.23-1.20 while USDCNY can trade within 6.76-6.7350. USDRUB has scope to trade in the 56-64 region for sometime. Dollar Yen is likely to remain below 135 for now with downside limited to 130.

The US Treasury yields have come-off sharply across tenors . The crucial support can be revisited now. It will have to be seen if the yields will manage to bounce back again or not. It is a wait and watch situation. The US nonfarm payroll and the unemployment data release today will be key to watch. The German yields have come down again failing to sustain the bounce. The bearish view is intact, and the yields can continue to fall in the coming days. The 10Yr and 5Yr GoI have come down sharply and have room to move down further and test their key supports from where we expect them to bounce. The Reserve Bank of India’s monetary policy outcome is due today.

Dow can rise towards 34000 while above 32300 while Dax has held below resistance at 13800 and needs to break on the upside to head higher towards 14000-14200. Nikkei can rise towards 28500 while above 28000. Shanghai is bearish below 3250 towards 3150-3100. Nifty has risen sharply and is bullish while above 17200 to see a rise towards 17700/800 eventually.

Brent and WTI have fallen below 95 and 90 respectively and could test the crucial support at 90-87 (Brent) and 85 (WTI) before reversing back from there. Gold has broken above the key resistance at 1800 and could be bullish on a sustained move above it. Silver and Copper have rebounded from yesterday's low and could be headed towards 20.5 and 3.6 respectively.

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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.

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