Morning briefing: EUR/USD remains capped below 1.1700

The near-term currency outlook is mixed but dollar-sensitive: the Dollar Index looks headed towards 99.40, EURUSD remains capped below 1.17, and Dollar-Yen may stay in the 159–160 range with downside risk below 159. EURINR and EURJPY look soft in the immediate term, while USDCNY could fall toward 6.70 on a break below 6.72. Aussie remains positive above 0.72, while Pound has declined below resistance near 1.37. USDINR could ease toward 95.30–95 if crude prices continue to decline.

The US Treasury Yields have bounced back. The downside is limited with strong support. The broader picture is bullish. A consolidation is happening for now. Ideally, we expect a bullish breakout of this consolidation and a fresh rise going forward. The US PCE has dipped slightly to 3.7% (YoY) in July from 3.73% in June. This did not have a major impact on the yield movement. The German Yields are inching up again. But the downside is still open to test their support before a sustained rise happens. The 10Yr GoI was closed yesterday. It is currently stuck in a narrow range. There is a chance of seeing some rise from here before the broader downtrend resumes.

Global equities remain broadly positive. Dow continues to strengthen and can rise towards 54000, while DAX needs a sustained break above 26500 to extend gains towards 26750-27000. Nifty has weakened after failing to sustain above 24300 but remains constructive above 24100, with scope for a bounce towards 24400-24500. Nikkei has surged above 67000 and can rise towards 67500-68000. Shanghai also remains positive above 3850 and can advance towards 4000 in the coming sessions.

Brent and WTI have bounced back from recent lows, while their broader ranges of $80-$95 and $75-$90 respectively can hold for some time. Gold and Silver have dipped but remain bullish, with Gold targeting $4750-$4800 and Silver likely to break above $70 towards $72-$75. Copper has reversed sharply from near $6.80 and remains vulnerable to a decline towards $6.55-$6.50 while below this resistance. Natural Gas remains strong above $2.90 and can rise further towards $3.00 in the coming sessions.