Morning briefing: EUR/USD may dip back towards 1.1400

Vikram Murarka Kshitij Consultancy Services

The Dollar Index fell after the softer US PPI but has bounced back and may hold above 100.30/100.00 before rising towards 101 or higher. EURUSD may dip back towards 1.14, while EURINR, if below 111, can fall to 109.50-109. Dollar-Yen may remain range-bound, and EURJPY needs to hold below 186 to fall towards 185/184. USDCNY can dip to 6.7550 while below 6.7850. Aussie and Pound may ease towards 0.69 and 1.35/3450, respectively, while USDINR can test 95.90-95.85 before rising towards 96.50 or higher.

The US Treasury Yields have dipped further. They have room to dip further and test their support. Thereafter a rise is possible again. The German Yields continue to remain higher and stable. Outlook is bullish and the yields can rise further from here. The 10Yr GoI has dipped. A further fall from here will negate the extended rise and drag it down from here itself.

Dow and DAX are likely to trade within the 52000-53000 and 24800-25500 ranges respectively. Nifty remains vulnerable below 24100, with a break below 24000 opening the downside towards 23800. Nikkei has turned weaker after breaking below 67000 and can decline further towards 66000 or lower. Shanghai also remains weak below 4000 and can pull back towards 3900-3850.

Brent and WTI can rise towards $90 and $85 respectively. Gold continues to hold above the key $4000 support, keeping the broader $4000-$4250 range intact. Silver is likely to remain range-bound between $55 and $65. Copper needs to sustain above $6.30 to extend its rally towards $6.40-$6.45. Natural Gas remains weak and can decline further towards $2.85-$2.80.

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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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