Morning briefing: Euro is headed towards the immediate support around 1.0250
Dollar Index while above 107.70/50 can extend rise towards 109 or higher as well. Euro is headed towards the immediate support around 1.0250. EURINR is falling within its broad range of 91-89. USDJPY and EURJPY are anticipated to rise back towards 153/54 and 160 respectively. AUDUSD and Pound can remain ranged within 0.63-0.61 and 1.26-1.23 respectively in the near term. USDCNY on a strong break past 7.30, can test 7.35 on the upside. USDINR tested 87.95 before coming down. Range of 88.00-86.95 is likely to hold for a while.
The US Treasury yields have inched up. The bounce from their support is holding well. That leaves the chances high for the yields to go further up in the coming days. The US CPI data release tomorrow will need a close watch. A higher CPI number would aid the Treasury yields to go up. The German yields continue to remain lower and stable. View is bearish. The yields can fall more from here. The 10Yr GoI is inching up towards the upper end of its range. The bias is positive to get a bullish breakout of its range eventually.
The Dow Jones and DAX have risen well. The Dow Jones is keeping the range of 44000-45100 intact. A break below 44000 would confirm a double top formation and could drag the index lower to 43000. DAX requires a decisive rise past 22000 to move higher towards 22200 and beyond. Nifty is holding above 23300, while it sustains 23300, a bounce to 23700-23800 could be seen, else the index could drop down to 23000-22800. Nikkei sustained below 39000 at 38800. Nikkei is closed today. Shanghai is respecting the resistance near 3320 and trading below it, but is sustaining above 3300. While above 3300, it could re-test the resistance of 3320.
Crude prices and Metals have rallied along with the Dollar after Trump announced a 25% tariff on aluminium and steel imports. Brent and WTI can test 77 and 73/74 respectively while Gold and Silver can test 3000 and 33 before pausing. Copper continues its uptrend and can head towards 4.7/4.8 soon. Natural Gas may has also risen and could be headed towards 3.5/3.6 before halting there.
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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.
