Morning briefing: EUR/USD can fall towards 1.1550 in the near term

Vikram Murarka Kshitij Consultancy Services

The Dollar Index is rising gradually and view remain intact to see a rise toward 100.00-100.50 levels. EURUSD can fall towards 1.155 in the near term. EURINR can trade within 105.50-104.50 region. EURJPY & USDJPY have scope to rise towards 186/187 & 160-162 levels respectively in the near term. USDCNY can fall towards 6.95-6.90 levels. Aussie is holding the 0.6750-0.6650 range for now. While Pound has slipped below 1.34 and if sustained, can fall towards 1.33 or even lower. USDINR remained closed yesterday. US Industrial production & US Capacity Utilisation are scheduled for release today.

The US Treasury yields remain volatile within their range. The 30Yr is near the lower end of its range and will need a close watch. Broadly, the yields have to break their range on either side to determine the next direction of move. The German yields are coming down as expected. They can fall more from here. The 10Yr GoI is going up in line with our expectation. The bias remains positive, and there is room to rise more.

The Dow and DAX can test resistances near 50,000 and 26,000 respectively while Nifty needs to hold above 25600 to rise back sharply else could be vulnerable to decline towards 25500/25000 on a confirmed break below 25600. Nikkei could see a near term dip but while above 52,000, overall view is bullish towards 54,000. Shanghai has resistance near 4150-4200, below which a dip to 4100-4000 is likely.

Crude prices have eased on softer geopolitical tensions but holding key supports keeps scope for a rebound towards $66-$68 in Brent and $60-$62 in WTI. Gold needs a sustained break above $4,600 to move higher towards $4,650-$4,700. Silver may test $88-$86 before resuming its broader bullish trend. Copper can rebound towards $6.10-$6.20 while support near $5.85 holds. Natural gas remains weak with downside towards $3.00 in the near term.

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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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