Morning briefing: EUR/USD faces strong resistance near 1.18
The Dollar Index has edged up but needs to reclaim 98 to move higher, else it risks slipping towards 97–96. EURUSD faces strong resistance near 1.18, with a dip towards 1.17–1.16 likely if it holds. EURINR has bounced from support and can rise towards 107. EURJPY remains range-bound with scope for a dip towards 183–182. Dollar-Yen is at a decisive zone near 156, which will decide the next move. USDCNY has fallen to key support near 7.00. Aussie is rising towards 0.68 before a possible reversal. Pound is slipping towards 1.3450. USDINR continues to trade within the 89.50–90.25 range while support holds.
The US Treasury yields continue to oscillate within their range. We will have to wait for the range breakout to get clarity on the next move. The German Yields are struggling to rise. That keeps the chances alive of seeing an intermediate fall first and then a rise. The 10Yr GoI has come down sharply after the RBI announced some measures to increase the liquidity in the market. The yields can fall more from here. Our earlier view of seeing a rise stands negated now.
Dow and DAX continue to rise as expected and could target 49000 and 24400 respectively. Thereafter, a break past the mentioned targets is needed for further bullishness. Nifty can slowly reach towards 26400-26600 on a sustained rise past 24200. Nikkei and Shanghai can rise towards 51000-52000 and 4000-4100 respectively.
Brent and WTI can move higher to test $64 and $60 before any reversal sets in. Gold remains steady and can extend the rally towards $4600–$4650. Silver stays strongly bullish towards $76–$78. Copper has broken above its range and can rise further towards $5.80–$5.85. Natural Gas has turned weak and can fall further towards $3.60–$3.40.
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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.
