Morning briefing: Euro above 1.1600 can attempt to rise back towards 1.1800
The Dollar Index is trading near the resistance at 98. For now, the immediate range of 99-96 remains intact. The Euro above 1.16 can attempt to rise back towards 1.18. EURINR is trading within the 100-101 range. EURJPY above 171 can target 175 in the near term. USDJPY and USDCNY are holding the respective ranges of 148-145 and 7.18-7.16/14 for now. The Aussie can continue to trade within the 0.66-0.65 region. The Pound has slipped below 1.35 but has another support at 1.34 which can be tested before attempting to rise back towards 1.36. USDINR can trade within 86.00-85.50 region for now. IN CPI data release scheduled today.
The US Treasury yields have risen well. If this sustains, the bias will remain positive and the yields can rise more this week. The US CPI data release tomorrow could be important. A strong (high) CPI number can aid the yields to go higher. The German yields keep our bullish view intact and are continuing to move up. The 10Yr GoI has come off sharply failing to sustain the breakout of its range. That keeps the range intact, and the yields can continue to oscillate within it for some more time.
Most equities closed lower last week and could extend losses early this week as well. The Dow Jones and Dax can test 44000 and 24000 in the near term, but it would be crucial to see if they break lower towards 43500/43000 and 23500/23000 or bounce higher. Nifty is nearing support at 25100-2500,0 which needs to hold for the index to rise back towards 25500 or higher; else it can target 24500. Nikkei has scope to test 39000 in the near term while Shanghai looks bullish above 3500 and can soon target 3600.
Crude prices are rising on speculation of possible U.S. sanctions on Russian energy exports, with Brent likely heading towards $72–$74 and WTI towards $70–$72. Gold may extend towards $3,400–$3,450, while Silver looks bullish towards $42–$44. Copper remains firm above $5.50 and may climb to $5.90–$6.00. Natural gas has opened higher and could rise further towards $3.45–$3.50.
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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.
