Morning briefing: EUR/USD has interim resistance at 1.0870/80

Kshitij Consultancy Services Team Kshitij Consultancy Services

Dollar Index may remain above 104 to target 105 while EURUSD has interim resistance at 1.0870/80, below which the pair can possibly test 1.08 soon. The pairs USDCNY, USDJPY and EURJPY have recovered well from the lows of 7.2193, 151.93, and 164.83 and the outlook appears bullish in the near term while the respective supports hold. The Aussie and Pound need to rise past 0.66 and 1.29 respectively to avoid a fall towards 0.6500-0.6400 and 1.28 on the downside. USDINR remained stable above 83.65 and can now be bullish towards 83.90 in the coming weeks while EURINR needs to rise past 91 to turn bullish. Crucial to watch the FOMC policy meeting this week, scheduled on 31st July 2024.

The US Treasury yields have declined sharply on Friday after the US PCE data release. The PCE for July came in at 2.51% (YoY) down from 2.6% in June. The Treasury yields can fall further this week. The US Fed meeting on Wednesday will need a close watch. The German yields are poised near their crucial supports which must hold to keep the uptrend intact. We will have to wait and watch. The 10Yr and 5Yr GoI have bounced back from their lows on Friday. But the broader trend remains down and any rise from here will be capped.

Dow Jones has risen back sharply above 40500. This has reduced the danger of falling and it may look to rise further while above 40000. DAX can rise towards 18600-18800. Nifty has surged, breaking above 24500 and is likely to test key resistance ahead, which if holds, can lead to a fallback. Nikkei has bounced back sharply but might face rejections from 39000-39500. Shanghai remains subdued and looks bearish for a fall towards 2850-2800 in the near term.

Crude prices have fallen back sharply and are likely to test key immediate support before a bounce back can happen. Gold, Silver and Copper have risen further but have resistance overhead which they need to overcome to strengthen the bullish case or else could witness a fallback. Natural gas sustains above 2.0 and while above it, the broader view will remain bullish.

Visit KSHITIJ official site to download the full analysis

Author

Kshitij Consultancy Services Team

Kshitij Consultancy Services

More from Kshitij Consultancy Services Team

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.