Morning briefing: Dollar Index can test 112-114 before falling off

Vikram Murarka Kshitij Consultancy Services

Dollar Index can test 112-114 before falling off from there while Euro can test 0.98/0.97. EURJPY fell sharply after the fluctuation seen in the USDJPY post the central bank keeping rates unchanged and the Ministry of Finance intervening in the currency markets. EURJPY can now test 138/137 while USDJPY can decline to 140/139. Aussie has managed to bounce above 0.66 while Pound trades lower and needs a strong bounce from 1.12 to head higher. USDCNY continues to rally towards 7.15/20. USDINR is bullish towards 81.00/30-81.50 while USDRUB can be stable. EURINR can trade within 79-80.50 for now.

The US Treasury yields have surged especially sharply at the far-end. The 10Yr and 30Yr have room to rise further to test their key resistances from here. We expect the resistances to hold and trigger a reversal. The German yields have risen sharply across tenors and are looking strong. They can continue to move up. The 10Yr and 5Yr GoI are gaining momentum and are bullish to move up further in the coming days.

Dow tested the support at 30000 as expected and if 30000-29500 holds, we could expect a bounce in the coming sessions else it may continue to be bearish. DAX is heading towards the support zone at 12400-12300, which if holds, can produce a bounce towards the higher level. Else it may continue to fall further on the downside. Nikkei is closed today. Shanghai has declined below 3100 and while below 3100, there is room to come down further on the downside. Nifty may continue to trade in a broad range 17400-18100 for some time.

Brent and WTI may continue to move sideways while below the resistance at 95 and 90 respectively. Gold, Silver and Copper too are likely to remain ranged for a while.

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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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