Morning Briefing: Euro can rise to 1.05-1.06 eventually

Vikram Murarka Kshitij Consultancy Services

Most currencies look ranged just now within expected levels. Dollar Index has scope to fall to 105-104 while Euro can rise to 1.05-1.06 eventually. EURJPY is bearish for a fall to 144-142 while below 146.Pound and Aussie can rise towards 1.22/24 and 0.68-0.70 respectively while USDJPY can fall to 137/136 while below 140. USDCNY and USDRUB look ranged within 7.10-7.20 and 61.50-59.00 respectively. USDINR continues to look bullish while above 81.50 and has scope to rise to 82 or higher. EURINR can trade within 85-84 region for a while before a bounce towards 86 is seen in the medium term.

The US Treasury yields are trading lower in the early Asian session today. The view of seeing a fall to test their key supports remains intact. The German yields continue to fall in line with our expectation and are keeping intact our bearish view. The 10Yr and 5Yr GoI have come down and are poised at the lower end of their respective range. It will have to be seen if the yields will bounce from here and keep the range intact or will break the range and fall further.

Dow was closed yesterday. DAX has risen above the resistance at 14450 and has room for a further rise in the coming sessions. Nikkei has declined a bit but view remains the same to see a test of key resistance on the upside before reversing lower from there. Shanghai remains range bound. Nifty has risen above 18400 but could face intermediate resistance ahead of it.

Brent and WTI remains stable but has scope to fall further from the current levels. Gold has scope to target further upside while above the support at 1720. Silver has declined but bias remains bullish for a rise in the near term while above the support at 21.20/21.00. Copper too remains bullish for a rally in the coming sessions 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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