Morning briefing: Pound is headed towards 1.3600/3650
The Dollar Index has slipped below 98 and can extend the fall to 97 or 96 max before attempting to rise back again. EURUSD can head towards 1.1750-1.1800 as mentioned earlier. EURINR needs a decisive break past 102.50 to head towards 103-104. EURJPY & USDJPY have turned lower from 173.02 and 148.17 itself. A further fall to 171-170 and 146-145 can happen respectively. USDCNY can also fall further within its broad range of 7.20-7.14. The Aussie and Pound are headed towards 0.66/6650 and 1.36/3650 respectively. USDINR yesterday slipped to the low of 87.38 but later recovered as well. While the deeper support at 87.25 holds, the target of 87.80-88.00 is kept open for now. IN WPI, IN Trade Balance and US PPI are some of the important releases scheduled today.
The US Treasury yields have dipped and could test 4.20% (10yr) and 4.75/70% (30yr) before rebounding to higher levels. The German yields have also dipped yesterday but the overall view is bullish while above the near term support levels. The 10Yr GoI tested 6.3911% but managed to bounce back well indicating underlying bullish momentum. An initial test of 6.55/58% is possible. Thereafter a decisive break above 6.58%, if seen can be further bullish in the medium term.
The Dow and Dax are trading higher. A decisive break above 45000 and 24000, both could head higher towards 46000-47000 and 25000 soon. Nifty could attempt to rise towards 24850 in the near term while above 24400. Nikkei appears bullish for the medium term, targeting 44000, while Shanghai has tested crucial resistance at 3700 and may face rejection from here.
Brent and WTI prices fell further on bearish inventory data and forecasts, with more downside expected in the near term. Gold is holding above $3,400 and could rise further unless it breaks lower. Silver is breaking resistance and may climb higher towards $40, while Copper is attempting an upside breakout targetting $4.60-4.80. Natural gas remains biased for a decline towards $2.75-2.70 despite a slight rise.
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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.
