Morning briefing: EUR/USD heads lower ahead of the ECB policy meeting

Vikram Murarka Kshitij Consultancy Services

Dollar Index has risen above 102 and the Euro is headed lower ahead of the FED and ECB policy meetings later this week. Dollar-Yen is sustaining the bounce and looks bullish towards 158, while EURJPY can rise to 177. EURINR can trade within 107-105.80 for the near term, while Pound can test 1.33 before a bounce can be seen from there. Aussie looks stable. USDCNY looks weak towards 6.65, while USDINR can rise to 95.50 this week. However, whether it would break past 95.50 and move higher or not is to be seen; there can be some pullback from levels near 95.50.

The US Treasury Yields remain stable. A strong follow-through rise is needed to go higher from here. Else, a fall to test their support can still happen first before the broader uptrend resumes. The US Fed meeting tomorrow will need a close watch. The German Yields have inched up. Resistance ahead can cap the upside and drag them lower again. The 10Yr GoI continues to move up. A key resistance zone is coming up which can halt the current rise and trigger a corrective fall. Need to wait and watch closely.

Dow needs to hold 52000 to extend the rise towards 53000 or higher, else it can fall towards 51000. DAX has scope to rise towards 25600-25800 while it holds above 25000. Nifty needs to sustain above 22600 to advance towards 23000, else it can fall towards 22350-22250. Nikkei needs a sustained break above 64000 to open the path towards 65000 or higher. Shanghai remains weak below 3700 and can fall towards 3600-3500.

Brent and WTI are declining as expected, with further downside towards $114–112 and $100–98, respectively. Gold has bounced above $4,000, but remains vulnerable to a sustained break below this level, which could drag prices towards $3,900–3,800. Silver also remains weak and can fall towards $52–50. Meanwhile, copper has risen as expected and can extend its gains towards $6.65–6.70 in the coming sessions.

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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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