Morning briefing: EUR/USD faces downward pressure toward 1.1400

Vikram Murarka Kshitij Consultancy Services

The Dollar index looks bullish towards 101-101.50 that could drag Euro towards 1.14 or lower. The USDJPY and EURJPY continue to look bullish while EURINR can decline towards 109. Aussie looks bullish towards 0.72/73 while Pound is headed towards 1.33/32. The USDINR has fallen exactly as expected supported by dip in oil prices. Crucial level to watch now would be 95.50. A bounce could take it back to 96-96.50 else a break below would open up 95.

The US Treasury and the German Yields remain lower. They both have room to dip further from here to test their support. After this corrective fall both the German and the Treasury Yields can rise back and resume their broader uptrend. The 10Yr GoI has come down sharply and is poised above a crucial support. We expect this support to hold and the yield to rise back from here.

Dow remains vulnerable below 53000, with a break below 52000 opening 51500-51000. DAX is testing 26000, with a break above this level opening 26500. Nifty needs to hold 23300 for a move towards 23500. A break above 23500 would open 23800. Nikkei remains below 67000, while Shanghai is testing 3950 resistance.

Brent and WTI have fallen amid US-Iran diplomatic talks, with $98-$96 and $90-$88 acting as crucial support regions. Gold needs to break above $4450 for a rise towards $4500-$4600. Silver can rise towards $68-$70 while above $63. Copper has surged but remains crucially placed around $6.80. Natural Gas has moved above $3.00 and can rise towards $3.20-$3.40 if sustained.

Visit KSHITIJ official site to download the full analysis

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.

AUD/USD meets fresh supply and tests 0.7100 amid weak Australian PMIs

AUD/USD has come under fresh selling pressure and is testing 0.7100 in the Asian session on Wednesday. Australia's flash PMIs showed manufacturing slipped into contraction and services expanding slowly for a second straight month, renewing the pair's downside. Furthermore, a bullish US Dollar acts as a headwind for the pair as traders keenly await the crucial Trump-Xi summit on Thursday. Meanwhile, markets shrug off US-Iran indirect talks.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold: Bull-bear tug-of-war extends ahead of Trump-Xi meet

Gold has come under fresh selling pressure, struggling near $4,350 in Asia on Wednesday, retracing a part of the previous rebound from sub-$4,300 levels. Traders are refraining from placing fresh directional bets on the bullion ahead of the highly anticipated meeting between US President Donald Trump and his Chinese counterpart Xi Jinping due later in the day.

Bitcoin steadies after strong rally, Ethereum and XRP ease into consolidation

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) bulls take a breather mid-week after gains of 6%, 4%, and 13% so far this week. BTC consolidates at $86,300, ETH hovers around $2,751, and XRP is at $1.57. The price action of these top three cryptocurrencies suggests bulls remain in control, although traders may have taken profits after the recent sharp rally.

AI capex enters the Fed's inflation case with October hike pricing past even money

AI capex enters the Fed's inflation case with October hike pricing past even money; UK headroom halved and French CDS at post-2020 wides before either budget lands; Pezeshkian in New York with a Gulf slot scheduled and no Iranian bilateral. Monday priced the same AI buildout at two completely different costs of capital.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.