Morning Briefing: The rally in the US Treasury yields continue

Vikram Murarka Kshitij Consultancy Services

Dollar Index has dipped a bit and can fall while below 114.50-114 as Euro may hold above 0.96 and can negate a fall to 0.95 in the near term. EURJPY is bullish while above 137. Aussie and Pound are trying to recover but needs to see a significant rise above 0.66 and 1.12/14 to become bullish for the medium term. Dollar-Yen is holding below 146 and can fall toward 142-141 soon. USDCNY is heading towards 7.20 while USDRUB can test 59-60.50. USDINR may rise too towards 81.80-82.00 or even 82.50 before a sharp reversal is seen. EURINR is bullish while above 78.

The rally in the US Treasury yields continue. The 10Yr has risen above its resistance while the 30Yr is yet to test its resistance and can rise further in the coming days and then possibly reverse lower. So, the 10Yr can either rise further or remain stable while the 30Yr continues to rise to test its resistance. The German yields continue to move up and have room to rise further. The 10Yr GoI has dipped but has support that can keep the overall uptrend intact. The 5Yr GoI sustains higher and keeps intact our bullish view to see further rise.

Dow and DAX continue to be bearish for a fall towards 29000-28900 and 11000 respectively. Nikkei has recovered slightly but is mostly likely to test key support near 26200-26000 in the coming sessions. Shanghai has fallen back again and keeps our bearish view intact. Nifty has fallen below 17200 and can head down further in the coming sessions.

Brent and WTI continues to fall and have room to come down further in the coming sessions . Gold, Silver and Copper continues to look bearish and has scope to test 1600, 17.5-17 and 3.2 respectively on the downside.

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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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