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Morning briefing: EUR/USD can tank lower to 1.1300

The Dollar index continues to rise and could move up to 101-101.50 while Euro can tank lower to 1.13 if it does not bounce back from 1.14. EURINR needs to bounce from 108 else it can fall to 107.50-107. EURJPY may hold within 183-186 region for now. USDJPY has risen well above 161 and can rise towards 162 soon. USDCNY can test 6.78 before coming off towards 6.76/75 again. Aussie looks bearish while Pound has already plunged to levels below 1.3250 and needs to bounce back to avoid further decline. USDINR may move higher on Dollar strength and Euro weakness. There is crucial support at 94.05 and lower near 93.85/90 which may hold.

The US Treasury Yields remain lower. There is not much room on the downside. Support is there to limit the downside. While the supports hold, the yields are likely to see a good rise going forward. The German yields are stable and lower. They can dip more from here before reversing higher again. The 10Yr GoI is coming down to test its support in line with our expectation. We can expect the yield to bounce back after this fall.

Dow and DAX faces immediate resistances and looks vulnerable to a pullback towards 51000-50000 and 24500-24000 respectively. Nifty has closed above its 21-week moving average and can rise further towards 24400, while Nikkei remains bullish above 70000 with scope to test 72000. Shanghai is holding above 4000 and can extend its rise towards 4150-4200 in the coming weeks.

Brent and WTI remains below $85 and $80 respectively. Brent can decline towards $75-$70, while WTI can fall towards $70-$65, where the downside could be limited and a corrective bounce back may happen. Gold continues to weaken and can decline further towards $4100-$4000, while Silver has reached the $65 level and looks likely to test $60. Copper is approaching key support near $6.25, which needs to hold to keep alive the chances of a rise towards $6.50. Natural Gas remains range-bound between $3.00-$3.50.


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Author

Vikram Murarka

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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