Morning briefing: Some recovery is seen in the currencies today

Good Morning!

Some recovery is seen in the currencies today after the volatile movement seen last week post weak US CPI data release. Dollar Index has paused to see a slight rise from 99.578 which has paused the rally in Euro near 1.1225. It is to be seen if the rise in Euro resumes in the near term with the Dollar Index resuming its fall towards 99. Pound and Aussie also see a corrective fall. Aussie may head towards 0.6750 or lower while resistance at 0.69 holds strong but Pound has some scope of testing 1.32 before falling from there. EURJPY can pause for a few sessions but can target 156/157 soon while USDJPY is bearish below 139. USDCNY can rise to 7.20 soon while USDRUB seems to be inching lower and could soon test 88 on the downside. EURINR can rise to 93 while USDINR can trade within 81.90-82.25/30 region.

The US Treasury yields have bounced but needs to see if that sustains to move further higher. It is a wait and watch situation. The German yields have bounced back. A strong follow-through rise is needed from here to move further up. Else they can fall back again. The 10Yr and 5Yr GoI have bounced. But the resistances ahead have to be breached to become bullish and avoid a fall.

Dow is at the upper end of its sideways range band and needs a strong rise past 34600 to target further upside. DAX has dipped but needs to sustain above 16000 to avoid a further fall on the downside. Nifty remains bullish to target new highs. Shanghai looks bearish in the near term.

Brent has fallen back failing to sustain the break above $81. WTI has too declined as the resistance at $78 has held well. Both the crude prices can dip further in the near term. Gold, Silver, and Copper have fallen back but the near-term supports are likely to hold and produce a bounce back toward our expected level.
 

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