Morning briefing: Euro is on the verge on breaking below 1.07

Vikram Murarka Kshitij Consultancy Services

Higher Australian CPI, drone attacks on Moscow and talks on the US debt ceiling all together has aided weaker currencies against the Dollar today. Dollar Index has risen back to 104+ levels while Euro is on the verge on breaking below 1.07. EURJPY and USDJPY are headed towards 149 and 138 respectively while Pound and Aussie are bearish too towards 1.2350/1.23 and 0.6450. USDRUB has plunged and could head towards 74/72 while USDCNY has broken above 7.08/09 and could be further bullish towards 7.15 which could put downward pressure on the Euro and Indian Rupee. EURINR has fallen and could head lower on a break below 88. USDINR can test 82.80/85.

The US Treasury yields have come further down sharply. The voting on the US debt ceiling deal that is likely to happen today is keeping the market nervous. The yields have room to fall further from here. The German yields have also declined sharply and can fall further. The 10Yr and 5Yr GoI remains mixed. The chance of a corrective rise is still alive before they resume their downtrend.

Dow Jones needs a strong follow-through rise from here to ease the downside pressure. DAX remain subdued. Shanghai is holding well below the resistance at 3240 and might see a deeper fall in the coming sessions. Nikkei has dipped further and failure to bounce back from near term support could drag it further down. Nifty remains stable and range-bound within the overall uptrend.

Crude prices fell sharply ahead of the OPEC+ meeting over the uncertainty whether the organization will increase further production cuts or not. Gold has risen above 1970 and can move up further on the upside. Silver has declined as the resistance at 23.50 is holding well. Copper has fallen and may come down towards 3.60.

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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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