Morning briefing: Euro could range within 1.08-1.09 before attempting to move up

Vikram Murarka Kshitij Consultancy Services

The Dollar Index holds above 104 and could show some stability before moving on either side while Euro also holds below 1.09, could range within 1.08-1.09 before attempting to move up. EURJPY could see a small corrective fall before moving towards 165/166. USDJPY holds above 150 and could trade within 152-150 for some time. Aussie could trade within 0.6350-0.6550 within which a fall towards the lower end of the range looks highly possible. Pound could test support at 1.23 before bouncing back to higher levels. Watch price action at 88 on USDRUB which if breaks can be strongly bearish. USDCNY could hover near 7.25, view remains bearish below 7.30. EURINR could trade within 91-89.50 while USDINR can trade within 83.10-83.30.

The US Treasury yields have come down again. The yields can test their supports first and then move up again. The German yields are coming down in line with our expectations. There is room to fall more from here before a reversal is seen. The 10Yr and 5Yr GoI remained stable. They look vulnerable to fall further from current levels.

Dow Jones can see a short-lived correction before heading higher. DAX remains bullish for the near term. Nifty can rise towards 20000 levels while above 19500. Nikkei is hovering below the resistance at 33500. Need to see if Nikkei breaks higher or falls back from there. Shanghai has inch down further but downside could be limited to 3025.

Brent and WTI have declined sharply below their immediate support and look bearish to test their next key support before a bounce back can happen. Gold has broken above 1980 and while this break sustain, a further rise can be seen in the near term. Silver continues to rise and remains bullish to target further highs. Copper can dip to 3.65 while below 3.75. Natural Gas remains 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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