Morning Briefing: Euro above 1.07 for now

Vikram Murarka Kshitij Consultancy Services

Dollar Index trades below 104 taking Euro above 1.07 for now. EURJPY may trade within 143-139 while Dollar Yen could trade within 133-130. Pound can limit its downside 1.18 and could have scope to rise towards 1.22 eventually. Aussie can rise to 0.7050 while above 0.69. USDCNY remains below 6.80 while USDRUB has fallen sharply below 72 and can continue the range of 68/67-72. USDINR needs to fall from current levels to decline for the coming sessions else we may have to allow for a rise to 83.00-83.10. Watch price action with the RBI policy meeting today which can cause some volatility in the market. EURINR could be ranged to bearish towards 88.

The US Treasury yields continue to move up and have come closer to their key levels. Need to watch closely if the yields are getting a strong follow-through rise or falling back from here. The Fed Chairman Jerome Powell indicated again that the inflation is cooling down but the pace of rate hikes can increase if the economy remains strong. The German yields remain bullish and can move further up from here. The 10Yr and 5Yr GoI looks mixed and can oscillate inside a range. The outcome of the RBI monetary policy meeting today can cause some volatility.

Dow has risen within its sideways range which keeps our bullish view intact of seeing a rise to 35000. DAX has inched down further but the support at 15200-15000 region might limit the downside. Nikkei has fallen back sharply and can fall to 27200-27000 in the near term. Shanghai is trading above the support at 3225, which if holds, can produce a rise towards 3300. Nifty remains mixed within the broad 17400-18000 range.

Brent and WTI have risen towards the immediate resistance at $84.50 and $77.50-78.50 respectively. We need to see if the resistances hold or not. Gold is slowly inching up within 1900-1880 region. Copper and Silver have scope to test 4.15-4.16 and 23.00 respectively on the upside.

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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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