Morning briefing: Euro heads towards 1.08

Vikram Murarka Kshitij Consultancy Services

Dollar Index has dipped below 104 while Euro heads towards 1.08. EURJPY and USDJPY have moved up well and can taregt 151 and 141 respectively. USDCNY looks bullish towards 7.15/20 while above 7.09/10 while Pound and Aussie have moved up and could continue to trade higher for a couple of sessions before facing a fall again by end of next week. USDRUB tested 82.80 yesterday and could attempt to test 83-84 soon with downside limited to 80. EURINR could hold above 88-88.50 for a few more sessions while USDINR can attempt to fall within 82.30-82.75/80.

The US Treasury yields have dipped slightly. They can oscillate and remain volatile in a sideways range ahead of the US Federal Reserve meeting next week. The German yields have dipped but can rise back again and move up to test their key resistances. The 10Yr and 5Yr GoI have risen well within their sideways range after the RBI meeting yesterday. We expect the range to hold and the broader downtrend to remain intact. The RBI left their policy rates unchanged yesterday.

Dow Jones continues to move up as expected. DAX is stuck in a narrow range but bias is positive to see a rally on the upside. Nifty fell sharply but has scope to get support near 18600-18400 region. Nikkei rebounds as the near term support has held well. Shanghai may continue to be range bound for some time.

Crude prices continues to trade mixed. Gold sustains above the vital support at 1950 and has rebounds toward 1980. Silver has risen sharply towards the immediate resistance at 24.50 and looks likely to break above it. Copper remains bullish for a break above 3.80 and target further upside.

Visit KSHITIJ official site to download the full analysis

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.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.