Morning briefing: EUR/USD hints at a medium-term downward shift

Vikram Murarka Kshitij Consultancy Services

The Dollar index has risen well but needs to sustain above 102 to ensure further upside, while the Euro trades below 1.13, indicating the start of a medium-term bearish movement. USDJPY can rise slowly towards 159 while EURJPY looks weak. EURINR could have limited downside and could soon bounce back in the coming sessions, while USDCNY could remain stable for this week. USDINR has mild scope to test 95.50 while above 96.35 before facing rejection from there towards 96-95.80. A decisive break above 96.50 could be bullish. Aussie and Pound could hold above crucial supports at 0.69 and 1.32 respectively.

The US Treasury Yields have risen back well from their lows on Friday. Their support has held very well. That keeps intact our bullish view to see more rise. The German Yields have come down sharply. They can fall further and test their support. Thereafter, the broader upmove can resume. The 10Yr GoI has moved up further. The bullish view remains intact. The yield has room to rise further from here.

Dow remains weak below 52000 and can decline towards 50000-49800. DAX needs to break 25500 for a rise towards 25750-26000. Nifty needs to sustain above 22600 for a rise towards 23000. Nikkei remains positive above 70000 and can rise towards 72000. Shanghai remains closed for the Golden Week holiday and resumes trading on October 8.

Brent and WTI remain positive above support, with further gains towards $105-$110 and $95-$100 possible. Gold needs to hold $4100 for a rise towards $4300-$4400. Silver needs to sustain above $60 for a recovery towards $63-$65. Copper remains weak and can decline towards $6.55-$6.50. Natural Gas can rise towards $3.10-$3.20 while above $2.91.

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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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