Morning briefing: EUR/USD could trade within 1.1550-1.1650

Vikram Murarka Kshitij Consultancy Services

Dollar Index fell along with the decline in USDJPY on possible intervention from the Bank of Japan. This has led to a short rally in major currencies against the US Dollar. Euro could trade within 1.1550-1.1650 in the near term while Aussie could rise towards 0.73. EURINR has declined as expected and could test 109 in the near term before trying to rebound from there. The Indian Rupee strengthened in the offshore Market as RBI stated a $127mln FCNR deposits so far. This could translate to further Rupee strength in the very near term taking it to 94.50 or even 94 before reversing. The Chinese Yuan can strengthen towards 6.70 soon while 6.7250/7270 holds. USDJPY and EURJPY look bearish towards 158-156 and 184 respectively for the near term.

The US Treasury Yields have come down slightly. Supports are there to limit the downside. The bullish view is intact, and the yields can rise more. The German Yields have risen above their key resistance. Need to see if this break sustains. If it does, then more rise is on the cards. The 10Yr GoI has come off from its high of Wednesday. But the upside remains open for more rise while it sustains above the immediate support.

Dow remains vulnerable to 52500-52000 while below 53500. DAX can decline towards 25500. Nifty needs to sustain above 24000 for a rise towards 24200, while a break below 23800 could drag it towards 23600. Nikkei remains weak and can decline towards 62000. Shanghai is likely to remain range-bound between 3850-4000 while below 4000.

Crude prices continue to strengthen towards $100 (Brent) and $95 (WTI) respectively. Gold remains vulnerable to a decline towards $4200 unless it sustains above $4600. Silver has weakened sharply and can dip further towards $62-$60 before a recovery. Copper is likely to remain range-bound between $6.50-$6.80 for some time. Natural Gas is attempting to break above $3.00, with a sustained break opening the way towards $3.25-$3.50.

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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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