Morning briefing: EUR/USD could see limited rise in the near term
Dollar index can rise towards 102 while Euro could see limited rise in the near term. USDJPY could rise towards 158/159 while EURJPY can dip to 177/176 while below 178. EURINR looks bearish towards 106/105 while below 107. USDCNY has declined sharply and could be headed lower towards 6.65. Aussie and Pound looks mildly bullish for the near term. Correlation between Brent and USDINR has weakened as the currency pair trades below 95 while Brent is at $110.17. Strong FII interest in the Jio Platforms IPO (to open today) could push USDINR towards 94.50 or lower, making a rise to 95.30–95.50 and especially above 96.00 increasingly difficult, while crude prices could continue to trade higher.
The US Treasury Yields are stable above their support. There is not much room left of the downside. The yields can resume their uptrend either from here itself after some more consolidation or after a dip to test their support. The German Yields have come down again as expected. They can test their support and then resume their broader uptrend. The 10Yr GoI continues to consolidate in a narrow range. The yield can make a bullish breakout of this range and go higher eventually.
Dow can rise towards 53500-54000 while it holds above 51900. DAX needs to hold 25250 to move towards 25800-26000. Nifty can rebound towards 23000 while above 22800, and a decisive break below 22800 can drag it towards 22400. Nikkei needs to stay above 64000 to recover towards 67000, else 62500 comes into view. Shanghai is holding above 3700 with scope for a rebound towards 3800.
Brent and WTI crude prices have rebounded and could rise toward $115 and $105, respectively, amid ongoing uncertainty over efforts to end the Iran war. Gold needs to hold above $4,100 to sustain its potential rally toward $4,300–$4,400, while a break below support could drag it toward $4,000–$3,900. Silver remains vulnerable to a decline toward $52–$50 below $60. Copper could rise toward $6.70–$6.80 if immediate support holds, while natural gas may extend its decline toward $2.85–$2.80 amid forecasts of above-average autumn temperatures in the US.
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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.
