Morning briefing: EUR/USD can trade within 1.1800-1.1400
The Dollar Index can head towards 100.50 in the medium term, while it stays above 97/96. EURUSD and EURINR can trade within 1.18-1.14 and 102.50-101.50 region respectively while the immediate resistance at 1.1750 and 102.50 holds. EURJPY & USDJPY can rise towards 174/75 and 150/51 respectively on a confirmed break past 173 and 148. USDCNY is likely to trade within 7.16-7.20 region for a while. The Aussie continues to hold the 0.645-0.655 range for now. Even if the Pound rises further, it can limit the upside to 1.3650 max. USDINR has a scope to fall towards 87.00-86.50 in the coming weeks before eventually bouncing back again.
The US Treasury yields have risen well last week. They have room to rise further this week and test their resistance. The German yields have surged on Friday and are now at their key resistance. Failure to breach this resistance decisively can drag them down. The price action in the next couple of days will need a close watch. The 10Yr GoI has been very volatile. They can remain higher in a range for some time.
The Dow rallied well on Friday to test resistance near 45203, but closed lower at 44946. If resistance holds, we may expect a decline to 44500-44000 in the coming days; else the index will have to sustain a rise above 45000-45200 for bullishness to continue. Dax could have scope for a decline to 24000-23500 while below resistance at 25000-24800. A broad range of 25000-23500 continues to hold. Nifty may test 24800-24850 within a range of 24850-24400. Further bullishness will set in on a break above 24850. Nikkei and Shanghai look bullish towards 44000 and 3750 in the near term.
Crude prices fell with Brent testing support at $65 and WTI near $62, both holding chances of a short-term bounce unless supports break, which could open deeper downside. Gold slipped below $3,400 and can decline towards $3,350 support, while Silver remains rangebound between $38.5–$37 awaiting a breakout. Copper continues to trade within $4.50–$4.30, and Natural Gas rebounded sharply but needs to hold above $2.8 to avoid a fall back towards $2.75–$2.70.
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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.
