Morning briefing: EUR/USD faces immediate resistance between 1.1650-1.1700 region

Vikram Murarka Kshitij Consultancy Services

The Dollar Index declined yesterday amid rising tensions between US and Europe over President Donald Trump’s proposal to purchase Greenland. The Dollar Index is stuck within 99.50-99.00 region. The targets of 100.00-100.50 levels are kept open for now. EURUSD faces immediate resistance between 1.1650-1.1700 region. EURINR is trading higher within 104.50-106.00 range. EURJPY & USDJPY can head toward 185/186 & 160-162 levels respectively. USDCNY can fall toward 6.95-6.90 levels. Aussie is holding the 0.6650-0.6750 range for now. Pound is attempting to rise back but faces resistance at 1.350-1.355 which can limit the upside. USDINR rose to 90.9950 yesterday. The pair need to see a break past 91 to bring 91.25-91.50 levels into picture.

The US Treasury yields have moved up further. The bias is positive as the yields are getting a good follow-through rise after breaking their resistance. The yields can rise more from here. The German Yields have moved up. Key resistances are ahead which have to be broken to negate our bearish view. We will have to wait and watch. The 10Yr GoI sustains higher. There is room to rise further to test its resistance. Thereafter the yield can turn down again.

The Dow was closed for Martin Luther King Jr. Holiday yesterday. Trump's threat to hike tariffs for European countries if they oppose his bid to buy Greenland has led the DAX to decline below 25000. Dax can further dip to 24500-24000 unless an immediate bounce back is seen from here. Nifty tested support at 25500. This needs to hold for Nifty to rise again in the near term else 25000 will come into the picture . Nikkei looks bearish towards 53000-52000. Shanghai trades above 4100 now. Only a break below 4050, if seen can make it vulnerable to decline towards 4000-3900. Else it can test 4150-4200 while above 4050.

Brent and WTI are holding above key supports, keeping the chances of a bounce towards $66–$68 and $60–$62 alive, respectively. Gold and Silver remain firm with upside seen towards $4,750 and $96–$98. Copper is stable above $5.8 and can recover towards $6.0–$6.2 unless this support breaks. Natural Gas has dipped and needs to sustain above $3.6 to move up towards $3.8–$4.0.

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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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