Morning briefing: EUR/USD trades above 1.1300-1.1270
The Dollar Index gained strength after the stronger US Consumer Confidence release at 98. Still, while below 101 the targets of 98-96 are kept open. EURUSD has declined a bit but we retain our bullish view while it trades above 1.1300-1.1270. EURINR is moving within a narrow range of 97.50-96.50. EURJPY can broadly remain within the 160-165 region. USDJPY has risen a bit but can face an immediate resistance at 145. AUDUSD is declining within the 0.650-0.635 range and the Pound if it falls further can test 1.34 on the downside before attempting to rise back. We need to see whether the USDCNY breaks past 7.21 or falls back again towards the support near 7.15 region. The USDINR has risen as anticipated and can extend it further to 85.50-85.75 in the near term. IN IIP data release is scheduled today.
The US Treasury Yields are coming down as expected. There is room to fall further to test their supports. The price action thereafter will need a watch to see if they are bouncing back or not. The German yields have dipped. But support can limit the downside and keep the broader bullish view intact. The 10Yr GoI remains stable. Bias remains bearish to see more fall. Any rise will be capped.
The Dow rose on the fast track of trade tariff talks between the EU and the US after Trump delayed the tariff implementation to 9th July during the weekend. Dow could rise towards 42500-43000. Dax could rise to 25000-25200. Nifty dipped below resistance at 25080. Nikkei has near-term resistance zone of 38000-39000 from where a rejection is possible, while Shanghai can trade within 3340-3400 region for sometime. Only a break below 3340 would be bearish to 3300 or lower in the medium term.
Brent and WTI have dipped and are expected to trade within $67–$63 and $64–$60 ranges, respectively, until a breakout occurs. Gold remains bullish despite dipping to $3,283, targeting $3,400–$3,450, while Silver holds a $34–$32 range below $34. Copper has found support near $4.72 and can rally higher towards $4.80–$4.90. Natural gas stays bullish above $3.50, aiming for $3.80–$4.00.
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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.
