Morning briefing: Euro could test 1.08/1.0750 soon

Vikram Murarka Kshitij Consultancy Services

Good Morning!

The Markets see a corrective movement after the sharp volatility that seeped in after the US CPI data released earlier this week. The Dollar Index holds above 104 and can test 105-105.50 while Euro has fallen from 1.09 and could test 1.08/1.0750 soon. EURJPY continues to remain bullish towards 165/166. USDJPY holds above 150 and could trade within 152-150 for some time. Aussie could trade within 0.6350-0.6550. The pound fall towards 1.23 while below 1.2550. USDCNY can rise back towards 7.30 while above 7.22. USDRUB has bounced well from 88 and could have scope to see a slow rise towards 93/94 soon. EURINR has dipped slightly and can test 89.50 while below 91. USDINR can rise towards the 83.20/30 zone again.

The US Treasury yields have bounced back. The downside from here is limited. We can expect the yields to remain above their supports. Overall, the Treasury yields can remain in a broad range for some time. The German yields have also bounced back. But one more leg of fall is likely to be seen before a sustained rise happens. The 10Yr GoI is coming down as expected. The 5Yr has broken its crucial supports and looks vulnerable to fall more.

Dow Jones, DAX and Nifty looks bullish for the near term. Nikkei has fallen back as the resistance at 33500 has held well. Shanghai has declined towards 3050 but downside could be limited to 3025.

Brent and WTI continues to dip and have scope to revisit their immediate support in the near term. Gold has declined after facing rejection from 1980. Whereas Silver and Copper have risen further and looks bullish to rise towards their immediate resistance. Natural Gas looks range bound within 3.3-2.9.

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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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