Morning briefing: EUR/USD can continue to trade within 1.1100-1.1250
The Dollar Index rose well after the higher-than-expected CPI release (4.08% YY for Oct-26 versus 3.72% for Sep-26). It remains bullish above 101, with scope for a rise towards 103-104, while only a break below 101 (less likely) could extend the downside to 100. EURUSD can continue to trade within 1.11-1.1250 while Dollar-Yen needs a breakout above 159 for a rise to 160 and beyond, else the 159-157 range can stay intact. EURJPY looks bullish towards 178-179. EURINR has scope to rise towards 105.50-106 while holding above 104.50, and USDCNY may rise slowly towards 6.68/69 with downside limited to 6.6650. The Aussie needs a breakout above 0.69 to turn bullish, while the Pound may keep fluctuating within 1.35-1.33 until a breakout gives clearer direction. USDINR has tested 93.69 so far and, with crude prices still trading lower, has scope to test 93.50.
The US Treasury Yields have risen back sharply after the inflation data release yesterday. The US Headline CPI rose 4.08% (YoY) in October compared to 3.72% in September. The support on the Yields has held very well. The strong bounce keeps our broader bullish view intact. A follow-through rise can take them further higher. The German Yields have also risen back from near their support as expected. We can expect them to go further higher. The 10Yr GoI seems to be turning down, failing to rise past the resistance. That keeps the downside open to fall more.
Global equities have stabilised after the recent AI selloff, with the Dow and DAX back above 52,000 and 26,000 and upside towards 52,800 and 27,000 while they hold. Nifty is holding well above 25,000 and can rise towards 25,800-26,000. Nikkei is gradually rising but needs a sustained move above 62,000 to negate the decline towards 52,000-50,000. Shanghai is holding above 3,600 and can extend the rise towards 3,750.
Crude oil prices fell sharply on Middle East peace hopes. Brent and WTI face further downside toward 90–85 and 85–80, respectively. Gold pulled back to test critical support at 4000, while Silver turned lower with key support at 50. Meanwhile, Copper maintains a bullish bias toward 6.45–6.50 while holding above 6.2, and Natural Gas broke key resistance to target 3.5 on colder forecasts.
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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.
