Morning briefing: EUR/USD can fall towards 1.160-1.155

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has risen further as the release of US CPI at 0.3% suggested that FED might keep the interest rates steady this month. The target of 100.00-100.50 remains into the play. EURUSD can fall towards 1.160-1.155 while it trades below 1.17. EURINR can trade within 104.50-105.50/106.00 region. EURJPY & USDJPY can head towards 186/187 & 160-162 levels respectively in the near term. USDCNY can fall towards 6.95-6.90 levels. Aussie & Pound are holding the 0.6750-0.6650 & 1.355-1.340 range respectively for now. USDINR is moving within the 89.75-90.25 range. A confirmed break past 90.25 will be needed to head towards 90.50 level. US PPI, US Retail Sales, US Current Account & US Existing Home Sales are scheduled for release today.

The US Treasury yields remain stable within their range. The yields can continue to oscillate within the range for some more time. We will have to wait for the range breakout. The German Yields remain lower but stable. While they sustain below their resistance, the bias is negative to see a fall in the coming days. The 10Yr GoI is holding well above its support and has risen. While the support holds, the bias is positive to see more rise.

The Dow and DAX are headed towards resistances near 50,000 and 26,000 respectively from where rejection looks possible. The immediate view is bullish till the resistance levels are tested. Nifty bounced yesterday, holding above 25600 but has crucial resistance at 26000 below which the index could be vulnerable to decline towards 25500/25000 on a confirmed break below 25600. Till then the range of 25600-26000 could hold. Nikkei has moved up on rising expectations of a snap election by the ruling party. While above 54,000 the higher Targets of 55,000-56,000 is on the cards. Shanghai has resistance near 4150-4200 from where a dip looks possible.

Brent has moved above $64 and tested $65.92 on Iran-related supply concerns, keeping the near-term outlook positive towards $67–$68. WTI can also rise towards $62–$64. Gold and Silver remain firm, with Gold targeting $4,650–$4,700 and Silver likely to break above $90 towards $92–$94. Copper can inch up towards $6.10–$6.20. Natural Gas continues to trade below $3.50, maintaining a downside bias towards $3.00.

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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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