Morning Briefing: Most currency pairs are likely to be ranged for a few more sessions

Vikram Murarka Kshitij Consultancy Services

Most currency pairs are likely to be ranged for a few more sessions unless a break on either side is seen. Dollar Index can trade within 110-111 while Euro can be ranged within 1.02-0.99/98, Aussie and Pound too can be ranged within 0.67-0.6950 and 1.14-1.16/18 respectively. USDJPY and EURJPY can be ranged within 146-142/140 in the near term. USDRUB continues to trade in a narrow range of 58-62 which may continue for now. USDCNY has been rising well and can attempt to test 7 which may hold in the near term. Any break above resistance at 7 will be strongly bullish. EURINR can be bullish while above 79, any break lower will open up chances of testing 78 on the downside. USDINR can trade within 79.20-79.60. Any break above 79.60 can be bullish to 79.80 or even higher.

The US Treasury yields have sustained higher at the near-end while those at the far-end have dipped slightly. We expect the yields to move up further towards their resistances ahead of the Fed meeting next week and then possibly reverse lower. The German yields have room to move up further from here before seeing a reversal. The 10Yr GoI is holding well above its support while the 5Yr has risen above its resistance. Both has potential to move up in the coming days.

Dow witnessed a slight recovery but remains vulnerable to a break below the support at 31000 and fall further on the downside. DAX has broken below 13150 and looks bearish for a further fall in the coming sessions. Nikkei has bounced back a bit from 27750 but outlook remain bearish to see a fall in the near term. Shanghai looks ranged. Nifty recovered well from a low of 17771.15 and could head higher while above the support at 17700.

Brent and WTI are hovering below the key resistance at 95.5 and 90 respectively. Only a break above these levels could see an extended rise on the upside. Gold is trading just above the key support at 1700 and looks vulnerable to a break below it and fall further on the downside. Silver has bounced back above 19.5 but outlook remain bearish to see a fall on the downside. Copper has scope to come down towards 3.4 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.

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