Morning briefing: EUR/USD price action hinges on key levels
The Dollar Index and Euro both hare trading near the crucial levels. Whether the Index will rise past 107.25 or falls below 106.50 and similarly will Euro fall below 1.04 or not is uncertain at the moment. EURINR can trade within a narrow region of 91.50-90.50. USDJPY has been coming off and watch price action closely around 150 to see whether it holds or extends the fall towards 148 initially. EURJPY is nearing the support around 156. AUDUSD is trading within a narrow range of 0.63-0.64, while Pound has risen past 1.26 and if sustained, can extend the rise towards 1.28 in the near term. USDCNY can rise back towards 7.30. USDINR was closed yesterday. The rise towards 87.00-87.15 remains intact in the near term. US Philifed Index data release is scheduled today.
The US Treasury yields have dipped slightly. Failure to rise and break the intermediate resistance can take the yields down in the near-term. In that case a sideways move is possible for some time. The German Yields have risen sharply and are moving up in line with our expectation. They have room to rise more. The 10Yr GoI remains stable but lower. A dip to the lower end of its range is possible if it breaks below the immediate support.
The Dow Jones continues to hold the range of 44000-45100; it needs a breakout on either side to get a clearer view. DAX sharply turned around from 22935. While above 223000-22000, a rise towards looks possible. Nifty lacks the strength to exhibit a sustained rise; however, bias remains, seeing a rise past 23000 to 23300-23500. A break below 22700 would take the index lower to 22500. Nikkei, within the range of 38000-40000, contrary to our view of seeing a rise to 39500, broke below 39000 and has fallen to 38500. A break below 38500 would lead to a further fall to 38000. Shanghai is trading near 3350. If it fails to rise past 3350, then it can come down to test the support of 3320-3300.
Crude oil prices have tested their respective resistance levels and could decline in the near term, with a range of $77-$73 (Brent) and $73-$69 (WTI). The outlook for Gold and Silver remains bullish, targeting $3000 and $34, respectively, in the near term. Copper needs to break below $4.50 to see further declines toward $4.20. Natural Gas must surpass $4.40 to remain bullish, aiming for $4.60-$4.80 in the coming weeks.
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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.
