Morning briefing: EUR/JPY has risen above 176.00 and if sustained

Vikram Murarka Kshitij Consultancy Services

While the Dollar Index faces immediate resistance at 99, Euro is nearing the support at 1.16. Watch price action closely around the current levels to see where both might be headed. EURINR is trading near the lower end of its 105-103 range. EURJPY has risen above 176 and if sustained, can test 178-180 before getting peaked out. Similarly, USDJPY can also head towards 152-154 before halting. USDCNY is closed today. The Aussie has supports coming at 0.655-0.650, above which the targets of 0.670-0.675 are kept open. The Pound has inched lower and can trade within 1.33-1.35 region for some time. USDINR appears to be stuck within 88.60-88.80 region.

The US Treasury yields are struggling to rise and have come down. Failure to sustain above their immediate support can drag them lower and negate the rise that we have been expecting. The German yields remain stable. We retain our view of seeing some more fall from here first and then a rise. The 10Yr GoI is managing to hold above its support and keeps the door open to rise from here.

The Dow has dipped below 49000 itself and could dip further towards 46500-46000. Note 47000 and 48000 are crucial resistances on the upside. The Dax can test 24500-24600 soon, a break above which will pave way for 25000. The Nifty rose to 25220.90 before closing lower. A rise above 25200-25250 is needed to rise towards upper resistance at 25400/500. Else, a dip to 25000 looks possible. The Nikkei is holding above 47800 and looks elevated for the near term, with chances of a gradual rise towards 50000. Shanghai is closed.

Brent and WTI remain weak below $67 and $63 respectively, with risks of further decline towards $62-60 and $58-56. Gold stays bullish above $4000 targeting $4100-4200. Silver can rise towards $48.50-49.00 while $47 holds. Copper may extend up to $5.15-5.20 while Natural Gas could dip to $3.30-3.20 unless it breaks above $3.5240 to head towards $3.60-3.70.

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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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