Morning briefing: EUR/USD can head towards 1.1800

Vikram Murarka Kshitij Consultancy Services

The Dollar Index can decline towards 97.50-97.00 in the near term. EURUSD & EURINR can head towards 1.1800 & 106.50-107.00 respectively. EURJPY can extend higher towards 184-185 before topping out. USDJPY continues to trade within the 158-154 range. USDCNY may test support at 7.05-7.045 before staging a rebound. AUDUSD is stuck within 0.67-0.66 region. GBPUSD can test 1.3450-1.3500 in the coming sessions while it sustains above 1.3350. USDINR faces immediate resistance near 90.70 which can be tested initially before before coming down.

The US Treasury yields have risen further and come close to their resistance. A break above the resistance will be bullish to take them higher. Else the yields can fall back again and trade in a sideways range for some time. The German Yields are moving up in line with our expectation. The bullish view is intact, and there is room to rise more. The 10Yr GoI is oscillating around its resistance. Need to see if it is managing to rise past the resistance decisively or falling back into its previous range. Wait and watch.

The Dow has fallen, holding below 49000. It can trade within 49000-48000 for the near term. DAX can decline to 24000-23500 while below 24200. Nifty is headed towards 26200-26500. Nikkei trades lower but needs to hold above 50000 to rise. Else can decline to 49000 before rebounding. Shanghai continues trade within the 3800-3950 region.

Crude prices remain under pressure with Brent and WTI likely to extend their weakness towards $60 and $56 in the near term. Gold has strengthened after testing higher levels and can continue its upmove towards $4400-4500. Silver holds above its key support near $60 and keeps the upside open for $65-66. Copper remains vulnerable below $5.60 with scope for a further fall towards $5.00. Natural gas stays bearish with downside risk towards $4.00-3.80 in the coming sessions.

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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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