Morning Briefing: Euro heads lower

Vikram Murarka Kshitij Consultancy Services

Dollar Index has risen to trade strong while Euro heads lower. EURJPY may remain in a sideways consolidation while below 144.30 while USDJPY may continue to rise along with a strong Dollar Index and can target 138 while above 136. Pound has fallen contrary to our expectation and is bearish while below 1.20 for a fall to 1.18. Aussie may fall towards 0.6650 while USDCNY has broken above our mentioned level of 6.95 and may target 7.00 in the near term. USDRUB may trade within 76.80-72.00 for a while. EURINR has broken below 88 and may fall to 87-86.50 while the fall sustains. USDINR can trade within 82.40/50-82.85/90 region for the near term unless a break on either side is seen which would determine the next course of direction.

The US Treasury yields have risen back well after the US PCE data release on Friday. The US PCE rose 4.71% (YoY) in January from 4.6% in December. The yields remain bullish to break the immediate resistance and rise further. The German yields continue to rise and are keeping the bullish view intact. The 10Yr and 5Yr are managing to hold higher. The bias remains positive to rise, breaking above the immediate resistance.

Dow has fallen below the support at 33000 and looks vulnerable to come down further from here. DAX has broken the 15250-15650 range on the downside and looks bearish in the near term. Nikkei has come down slightly but overall bias remains bullish. Shanghai may continue to trade sideways with a bullish view of seeing a rise towards the upper end of the range. Nifty can break 17400 following the weakness in the global markets.

Brent and WTI are likely to test immediate resistances in the near term. Gold, Silver and Copper have fallen below their respective support levels and have scope to come down further from here.

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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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