Morning briefing: Euro could test 1.07-1.0750

Vikram Murarka Kshitij Consultancy Services

ECB raised rates by 50bps as expected. Dollar Index and Euro could test 104-103.50 and 1.07-1.0750 respectively while USDJPY can be ranged within 135.20-132. EURJPY looks largely stable within 139-145 region. Pound is attempting to move up to 1.22 which needs to break higher for it to turn bullish. Aussie and USDRUB can move up within 0.6550-0.6750 and 75-78 respectively while USDCNY can hold within 6.80-6.95. USDINR has scope to test 83 while downside could be limited to 82.50. EURINR can rise to 89 while above 87. Break below 87, if seen will open up chances of a fall to 86.

The US Treasury yields have bounced back from near their key supports. A strong follow-through rise can take the yields further higher and reduce the danger of breaking the supports. The German yields have risen back after the ECB raised the rates by 50-bps. However the chances of falling back to test the supports is still there. The 10Yr and 5Yr GoI looks vulnerable to fall more from current levels.

Dow, DAX and Nikkei have risen back well and can test immediate resistance in the near term. Shanghai remains stuck in a narrow range. Nifty can rise towards 17200 again today taking cues from the global market.

Brent and WTI has rebounded and may rise towards their immediate resistance in the near term. Gold and Silver look range bound while below 1950 and 22.50. Copper has risen back but may face resistance at 3.90.

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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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