Morning briefing: Dow and Dax look stable
The Dollar Index has immediate upside capped at 101 and below it that view remains intact to see a fall towards 98-96. The Euro can head towards 1.15-1.16, while it trades above 1.12. EURINR has interim resistance at 97.50, need to see whether it holds or continue the rise further. EURJPY on a break below 162 can test 160 on the downside. Overall, it can broadly remain ranged within 165-160 region. USDJPY below 144 can extend the rise to 142-140 in the coming sessions. AUDUSD continues to trade within the range of 0.650-0.635 for a while. The USDCNY can broadly remain ranged within 7.22-7.18 region for a while. Pound needs to rise past 1.35 to test upper resistance at 1.36. Else, a fall back towards 1.32-1.31 can happen. The USDINR rose past 86 yesterday. The outlook at the moment appears uncertain. Will have to wait for the market to open to see whether it rises towards 86.25/50 or falls back towards 85.50. US New Home Sales data release scheduled today.
The US Treasury Yields have come down sharply failing to sustain the rise. Support is there near current levels which if broken can drag them further lower. We will have to wait and watch. The German yields sustain higher. Outlook remains bullish, and there is room for the yields to rise further. The 10Yr GoI has bounced. But upside can be capped. View remains bearish. The yield can fall back again.
Dow and Dax look stable. Dow needs to sustain above 41500 to rise slowly towards 42500-43000, while Dax needs to see an immediate rise to avoid a fall to 23500-23000 and instead target upper levels of 24500-25000. Nifty has scope for a further dip to 24000 before turning up towards 24800-25000 in the coming 1-2 weeks. Nikkei could rise slowly towards 38000-39000 while above 37000. Shanghai can trade within 3400-3350 for some time.
Crude prices are falling contrary to earlier bullish expectations, with possible declines toward $60 ,(Brent) and $56 (WTI) respectively amid OPEC+ production concerns. Gold remains on track for a rise toward $3,400–$3,450 despite a minor dip. Silver has dropped from resistance at $34 and may decline further toward $32. Copper shows mixed signals but leans slightly bullish if it breaks above $4.7. Natural Gas rebounded strongly after a steep fall, and while above $3.5, it could move up towards $4.
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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.
