Morning briefing: EUR/USD has rise past 1.1850

Vikram Murarka Kshitij Consultancy Services

The DXY declined over the news of Chinese banks might cut U.S. Treasury holdings. If the fall continues further, a test to 96.00-95.50 can be seen. EURUSD has rise past 1.1850 and while it sustains, a test to 1.20 and above can happen. EURINR has a scope to rise towards 109-110 while it remains above 107. EURJPY can remain ranged within 187.50-182.50. USDJPY has been coming off and a break below 155 if seen can make it vulnerable to extend the fall towards 154-153 levels. USDCNY can drift toward 6.90-6.85 levels. The Aussie is trading higher within 0.69-0.71 region. Pound has risen past 1.365 and if sustained, can head toward 1.37-1.38 levels. USDINR can remain ranged within 90-91 region for now. US Retail Sales is scheduled for release today.

The US Treasury yields have come down sharply from their highs. They can fall more from here. The unemployment data release tomorrow will need a close watch. The German yields sustain lower. They have room to fall more from here to test their support. The price action thereafter will need a close watch. The 10Yr GoI continues to move up in line with our expectation and keeps intact our bullish view.

The Dow and the DAX have risen well but need to sustain trade above 50500 and 25000 to move up further else could be headed for a correction soon. Nifty has risen too and could continue to rise slowly towards 26000 and gradually higher. Nikkei continues the election rally and may continue to rise towards 58000-58500 before pausing for a correction. Shanghai is rising towards 4200 as expected.

Brent has risen on higher risk premium after US advisories around the Strait of Hormuz but remains capped below $70 within $65–$70, while WTI continues to trade in a $61–$66 range. Gold is holding below $5100 and needs a sustained break to move towards $5300–$5500. Silver retains an upside bias towards $90–$95. Copper requires a break above $6.00 for a move to $6.20–$6.40. Natural gas is holding near $3.10 support with scope for a bounce towards $3.30–$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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