Morning Briefing: Dow continues to rise above 34000 keeping our bullish view intact

Vikram Murarka Kshitij Consultancy Services

Dollar Index has declined sharply post the FED meeting minutes released yesterday and could be headed towards 105/104 while Euro has scope to rise to 1.05/1.06. Aussie and Pound are headed towards 0.68 and 1.22 while EURJPY holds below 146 and can fall. USDJPY can test 136 before bouncing back from there. USDCNY can test 7.10 while USDRUB remains within 59-61.50 region. EUINR has risen sharply and can test 86. USDINR can be ranged within 82-81.50 region before breaking higher eventually.

The US Treasury yields are continuing to fall in line with our expectation. The minutes of the US Federal Reserve’s November meeting showing that the pace of rate hikes would be slowed down soon has dragged the yields lower. The Treasury yields have room to fall more from here. The German Yields are coming down as expected and can fall further to test their key supports. Thereafter a bounce is possible. The 10Yr and 5Yr are looking mixed and are stuck in a sideways range.

Dow continues to rise above 34000 keeping our bullish view intact. DAX remained stable but overall view remains bullish to see a rally on the upside. Nikkei has risen as expected and has room to test key resistance on the upside before reversing lower from there. Shanghai looks mixed but broader picture remains weak while below resistance at 3125-3150. Nifty remains bullish to see a break above 18400 while above the support at 18100-18000.

Brent and WTI fell sharply to $84.12 and $76.87 yesterday on talks of price cap on Russian oil and release of higher than expected US gasoline inventory data. As per the news, G7 nations are considering a price cap on Russian seaborne oil in the range of $65-70/bbl. Gold recovered well from a low of 1719 as the support at 1720 seems to be holding well while Silver has broken above the resistance at 21.30/50. Both the metals have scope to rise further on the upside while above 1720 (Gold) and 21.50 (Silver) respectively. Copper remains bullish for a rise towards 3.80-3.85 while above the support at 3.5.

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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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