Morning briefing: EUR/USD can decline below 1.1100

After the higher US CPI release, traders now fully price in a December rate hike, with an 87.1% chance of a 25bps increase and a 12.9% chance of a larger 50 bps move, according to the CME FedWatch Tool. This has kept the Dollar Index higher and led the Euro to decline below 1.11. While the direction holds, the DXY can head towards 103/104 while Euro can fall towards 1.1050/1.10. Dollar-Yen needs a breakout above 160-160.50 and beyond, to move further upwards while EURINR has scope to decline further towards 102 on a break below 104. USDCNY is bearish. The Aussie and Pound too look to decline towards 0.68 and 1.32 while the USDINR could hold within 93.50-94.00 for a few sessions.

The US Treasury Yields seems to be struggling to get a strong follow-through rise. They have to get a sustained rise above their immediate resistance in order to go higher. Else they can fall back again. The German Yields are holding higher. While they sustain above their support, the bias is bullish to see more rise in the coming days. The 10Yr GoI is attempting to bounce back again. If this sustains, a corrective bounce is possible before the fall resumes.

Global equities remain firm, with the Dow and DAX holding above 52,000 and 26,000 and upside towards 52,800 and 27,000. Nifty needs to hold above 25,000 to rise towards 25,800-26,000. Nikkei needs a sustained move above 62,000 to negate the expected decline and open the path towards 64,000. Shanghai is holding above 3,600 and can extend the rise towards 3,750.

Crude oil prices remain vulnerable to further near-term declines. Brent and WTI target 90–85 and 85–80, respectively. Gold broke below 4000 and looks weak toward 3950–3900. Silver continues its slide toward 50 support, risking deeper losses to 48–45. Meanwhile, Copper relies on 6.2 support for a bounce toward 6.45–6.50, while Natural Gas faces resistance near 3.4 that could push prices back toward 3.0.