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Morning briefing: EUR/USD has scope to test 1.1600-1.1700

The Dollar index may dip to 99.5-99, while the Euro has scope to test 1.16/17 while above 1.15. EURINR looks bearish below 111, while the EURJPY could test 186 while above 185. USDJPY continues its slow uptrend while USDCNY looks bearish towards 6.76/75 while below resistance at 6.80. Aussie and Pound can rise to 0.71-0.7150 and 1.35 respectively from current levels. USDINR dipped to 95.2275 yesterday. There is scope for a further dip to 95 soon.

The US Treasury Yields have come down sharply. A further dip from here can drag them lower. They have to rise back immediately and breach their resistance to go higher. The US CPI data release today will need a watch to see if it is providing the needed trigger to rise back. The German yields are holding higher. A follow-through rise from here can take them further higher and avoid falling back. The 10Yr GoI has come down as expected and is at an intermediate support. An extended fall is possible if the yield fails to bounce back immediately.

Dow and DAX remains vulnerable to further declines towards 50000 and 24000 respectively. Nifty continues to show resilience and can rise towards 23,400-23,600 while holding above 23,000. Nikkei remains range-bound and needs a break below 64000 to trigger a fall towards 63000. Shanghai is struggling below the key 4000 resistance and, unless it breaks higher, a decline towards 3900-3850 remains likely.

Crude prices are testing the key $90 level, and a sustained break lower could drag prices towards $85, while holding above it may lead to a recovery towards $100 in the coming weeks. Gold has fallen to near $4200 as expected and risks a further decline towards $4100-$4000 if this level breaks. Silver remains weak and can extend losses towards $62-$60. Copper is holding above immediate support and can recover towards $6.50-$6.60 if this level remains intact. Natural Gas continues to weaken towards $3.00, with the broader $3.00-$3.50 range likely to hold for now.


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Author

Vikram Murarka

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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