Morning Briefing: Euro is headed towards 104 and 1.06/0650

Vikram Murarka Kshitij Consultancy Services

Dollar Index and Euro are headed towards 104 and 1.06/0650 while EURJPY is headed towards resistance at 145. Pound and Aussie can test 1.25/26 and 0.68/69 respectively and look bullish from current levels. Dollar Yen holds below 138 and can fall to 135-132-130 in the medium term while USDRUB could range within 60-64. USDCNY is bearish while below 7.00 and could slowly move towards 6.90/88. USDINR can test 82.25/00 before bouncing back towards 82.75/83.00 while EURINR can test 87-88 while above 85.50.

The US Treasury yields have inched up slightly. There is still room left of the downside to test the key supports before a strong reversal happens. The German yields have inched up but are likely to be short-lived. A further fall is possible from current levels. The 10Yr and 5Yr GoI have moved up and seems to be gaining strength. A strong break above the immediate resistance will turn the outlook bullish and will negate the danger of a fall.

Dow is holding well above the support at 33500 and is attempting to bounce back from there. DAX tested 14200 as expected and is trying to bounce back. Nikkei has rebounded and if the bounce sustains a rise towards immediate resistance is possible. Shanghai may remain range bound while below 3225. Nifty is holding up well above the support at 18500 and while above it there is scope to rise to our expected level.

Brent and WTI have come down further but the key supports on the downside is expected to hold and produce a bounce back from there. Gold has scope to rise towards 1825 while Silver and Copper can target further upside on sustained break above 23.50 and 3.90/3.93 respectively.

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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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