Morning Briefing: Euro can fall to 1.07-1.0650

Vikram Murarka Kshitij Consultancy Services

The strong US NFP data has taken the Dollar Index higher as other currencies decline. While the Dollar Index moves higher towards 104-105, Euro can fall to 1.07-1.0650, Pound and Aussie can decline to 1.20/18 and 0.68 respectively while Dollar Yen has been pulled higher but need to see if the rise would sustain and EURJPY could face rejection near 143. USDCNY has risen but could remain within 6.70-6.80 while USDRUB can trade below resistance at 72. USDINR can rise towards 82.50 while EURINR can test 88.

The US Treasury yields have risen back sharply thereby reducing the danger of a deeper fall. The strong US NFP and Unemployment data release on Friday has triggered this bounce. A further rise is possible in the coming days. The German yields have also risen sharply and are keeping our bullish view intact. The 10Yr GoI looks vulnerable to fall more while the 5Yr has to sustain above its key support to avoid a deeper fall from here.

Dow is stuck between 33500 and 34300. DAX has scope to test key resistance at 15600 before a corrective fall can be seen from there. Nikkei continues to rise and remains bullish in the near term. Shanghai has fallen further and looks bearish to see a test of immediate support at 3210. Nifty has risen well above 17800 as expected and has scope to move up further from here.

Commodities have declined sharply below their respective mentioned supports after the release of higher that expected US non-farm payroll data, which boosted the US Dollar Index strength. US NFP comes at 517K higher than market expectation of 193K. Brent and WTI have fallen below their key support at $80.50 and $75 respectively and while below these levels, there is room to come down more in the near term. Gold is vulnerable while below 1900. Silver and Copper looks bearish to come down further in the near term.

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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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