Morning briefing: Dollar Index continues trade within 106-109

Vikram Murarka Kshitij Consultancy Services

Good morning!

Dow needs to hold above 31500 to retain our bullish view of seeing a further rise on the upside while Dax has fallen and can test support at 13000-12900. Nikkei has declined and could test 27500-27000 in the near term. Shanghai is trading closely within a narrow range of 3240-3280. Nifty is likely to fall on the downside while below 16500.

Brent and WTI have fallen back after testing their immediate resistances at 107.5 and 100 respectively. While below these resistance outlook is bearish to see a dip in the near term. Gold has fallen towards the support at 1710 on a surge in the US Dollar index. Silver continues to remain ranged. Copper has come down to test its immediate support after rising sharply towards 3.5 yesterday.

Dollar Index continues trade within 106-109 while Euro has dipped below 1.02 and is headed towards 1.01-1.00. Aussie can remain in 0.6880-0.70 for next 1-2 sessions while Pound is ranged within 1.21-1.1960. EURJPY remains above 138 and has scope to rise towards 140-142 on the upside. USDCNY can test 6.77/78 before falling off towards 6.74 in the medium term. USDRUB can trade within 61-56 region while 61 is an immediate and important resistance. USDINR can trade within 79.60-80.05 unless a break on either side is seen.

The US Treasury yields have inched up across tenors. The outcome of the US Federal Reserve meeting will determine whether the yields will rise from here or will fall to test the crucial supports before reversing higher. The German yields have tumbled again and are looking bearish to fall further from here. The 10Yr GoI looks weak to break its support and fall further while the 5Yr GoI looks mixed within its narrow range.

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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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