Morning briefing: EUR/USD head towards 1.1700

Vikram Murarka Kshitij Consultancy Services

Possible intervention again by the BOJ has led the USDJPY to plunge leading to a dip in the Dollar Index as well ahead of the NFP data release today. Euro and EURINR head towards 1.17 and 110-110.50 respectively while EURJPY has also plunged below 182 and looks bearish for a test of 180. Aussie could rise towards 0.73 while the Pound could test 1.3450 before rebound from there. USDCNY is headed towards 6.71/70. The Indian Rupee has scope to strengthen to 94 before seeing a reversal.

The US Treasury Yields remain higher and stable. Outlook remains bullish. There is room to rise more. Any dip from here can be short-lived as supports are there to limit the downside. The US unemployment data release today will need a close watch. The German Yields are hovering around their key resistance. A strong follow-through rise is needed to go further higher. Else the yields can fall back. The 10Yr GoI has come down but sustains above its support. Short-term picture remains positive. But, an intermediate dip looks likely before the yield goes higher.

Dow has turned stronger after breaking above 53000 and can rise towards 54500-55000 on a break above 54000. DAX has bounced back and can rise towards 26500. Nifty remains weak below 24000, with support near 23800 needing to hold to avoid a decline towards 23600. Nikkei remains weak and can decline towards 62000. Shanghai is likely to remain range-bound between 3850-4000 while below 4000.

Brent and WTI continue to move higher and can rise towards $100 and $95 respectively. Gold has bounced sharply after stronger US ADP jobs data, but needs to sustain above $4600 for a rise towards $4700-$4800. Silver has also recovered and needs a sustained break above $70 for a move towards $75-$80. Copper remains range-bound between $6.50-$6.80, while Natural Gas remains weak and needs to break above $3.00 for a rise towards $3.25-$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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