Morning briefing: EUR/USD holds stable

Vikram Murarka Kshitij Consultancy Services

Dollar index and Euro holds stable while USDJPY has risen and EURJPY needs to rise above 178 to prevent further decline towards 177/176. EURINR looks bearish towards 105 while below 107. USDCNY needs a break below 6.69 to decline further towards 6.68. USDINR can attempt to test 94.75/50 with some chances of a sharp bounce back from there. We may expect a near term trade of 94.50-95.10 to hold for the very near term. Pound looks ranged while Aussie can slip below 0.69 in the medium term.

The US Treasury and the German Yields are coming down in line with our expectation. Both can have some more room to fall. They can test their support and reverse higher to resume their broader uptrend. The 10Yr GoI is holding higher. The outlook remains bullish. The yield can rise more from here.

Global equity markets have largely recovered, with the Dow potentially rising towards 52,500-53,000 and the DAX moving towards 26,000. Nifty needs to sustain above 22,800 to target 23,500, while a failure to hold could trigger a pullback towards 22,600. The Nikkei remains vulnerable to a decline towards 64,000 or lower, whereas Shanghai could rise towards 3,900.

Crude oil prices have risen amid escalating Middle East tensions, with Brent needing to break above $108 to rise towards $110-$112 and WTI potentially moving towards $100. Gold needs to hold above $4,100 to target $4,300-$4,400, while silver remains vulnerable below $60. Copper could rise towards $6.70-$6.80 as long as immediate support holds, while natural gas is expected to trade within the $3.00-$3.50 range.

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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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