Morning briefing: EUR/USD may trade within 1.1100–1.1250

The Dollar Index rose sharply on Friday after the much higher than expected US NFP data release, now raising the chances of a rate hike in Dec by 25bps. The index remains bullish above 102, with 103–104 in view, while EURUSD may trade within 1.11–1.1250, with a break below 1.11 opening the way to 1.10. Most other currency pairs remain broadly ranged. Dollar-Yen can trade within 159-157/156, while EURJPY may consolidate within 176–178. EURINR looks bearish towards 102 unless it recovers above 106, while USDCNY may hold within 6.66–6.69. The Aussie remains vulnerable unless it sustains a recovery above 0.69; the Pound could rebound while support near 1.33 holds. USDINR remains bearish below 94.50 following its close at 93.90 on Friday on a sharp decline in crude prices. Unless a sharp rebound is seen above 94.50, the view remains bearish.

The US Treasury and the German Yields are holding well above their support as expected. The Treasury Yields have bounced back well and can go higher from here. The German Yield on the other hand seems to lack strength. They need a strong follow-through rise from here to go up. We will have to wait and watch. The 10Yr GoI is holding higher but will have to rise past the immediate resistance. Only then it can go up and get some relief. Else, more fall can be seen from here.

Global equities remain under pressure, with the Dow and DAX weak and downside towards 50800 and 25200-25000. Nifty is holding near 25000 and needs to sustain above it to rise towards 25800-26000. Nikkei remains weak below 62250-62000, with scope to decline towards 52000-50000. Shanghai holds above 3600 and can rise towards 3750.

Crude Oil prices remain weak. Brent and WTI stay skewed toward declines near 90–85 and 85–80 while capped below 105 and 95, respectively. In precious metals, Gold advances in line with expectations above 4000 toward potential targets of 4200–4250, while Silver has bounced as anticipated with upside potential targeting 55–56. Meanwhile, Copper rebounded above 6.3 after holding critical support near 6.2, opening the door for gains toward 6.45–6.50, and Natural Gas pushes toward the upper bound of its 2.7–3.2 range near 3.2.