Morning briefing: EUR/USD seems to be stuck in the 1.1580-1.1680 region

Vikram Murarka Kshitij Consultancy Services

News that Iran is halting talks with the US and threatens to fully close the Strait of Hormuz is likely to weigh on the currency markets today. Dollar Index has bounced above 99, while the Euro seems to be stuck in the 1.1580-1.1680 region. EURINR may limit its dip to 110.35 and move up towards 111 today if Indian Rupee weakens against the Dollar. EURJPY could dip towards 185 while USDJPY looks bullish for the near term towards 160 or higher. USDCNY is headed towards 6.75. Aussie and Pound can dip to 0.71 and 1.34/3350, respectively. USDINR might bounce back towards 95.00-95.55 today.

The US Treasury Yields have come down again. Failure to sustain the bounce keeps alive the danger of seeing an extended fall breaking below their support. The German Yields have come off from their highs indicating lack of strength. That keeps the door open to test their support first before reversing higher again. The 10Yr GoI is inching up. It has to rise past the immediate resistance to go higher and negate the chances of falling back. Wait and watch.

Dow and Nikkei have turned lower after recent highs due to renewed Middle East tensions and could see further declines if the situation remains heated. DAX has corrected sharply but needs a sustained break below 25000 to turn bearish, otherwise a bounce towards 25500-26000 remains possible. Nifty continues to weaken in line with expectations and can fall further towards 23,300-23,200. Shanghai also remains under pressure and may decline towards 4025-4000 in the near term.

Brent and WTI have rebounded sharply on renewed geopolitical tensions and can rise towards $100 if the situation remains heated. Gold and Silver may remain within broad ranges of $4400-$4600 and $70-$80 respectively. Copper stays positive and needs a break above $6.60 to rise further towards $6.65-$6.70 or higher. Natural Gas has weakened and could test the key $3.00 support in the coming sessions.

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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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