Morning briefing: Euro can attempt to test 1.1600 before coming down towards 1.1500

Vikram Murarka Kshitij Consultancy Services

Most currencies are trading strong against the Dollar Index which might trade between 100-99.40 for the near term with an eventually rise beyond 100 in the coming days while Euro can attempt to test 1.16 before coming down towards 1.15. USDJPY has recovered well and looks poised to test 160 and higher soon while EURJPY can slowly rise towards 185-160 region. Aussie and Pound can test 0.71-0.72 and 1.35+ before facing rejection from there. USDCNY can target 6.70 in the near term while below 6.75. USDINR could trade below 95.50.

The US Treasury Yields are moving up in line with our expectation. They can rise further from here and test their resistance. A short-lived correction is possible thereafter. The US CPI data release tomorrow will need a close watch. The German Yields have got a good follow-through rise. That keeps intact our bullish view. The yields can rise more. The 10Yr GoI is still stuck inside the narrow range. We expect it to break the range on the downside and fall going forward.

Dow is likely to remain range-bound within the 53000-55000 range for some time. DAX remains bullish above 26000 and can rise towards 27000 if it breaks sustainably above 26500. Nifty continues to hold above the key 24500 support and can advance towards 24800-25000 in the coming week. Nikkei remains strong and can extend its rally towards 68000-70000. Shanghai also continues to strengthen and can rise further towards 4000-4050 in the near term.

Brent and WTI are likely to remain range-bound within $80-$100 and $75-$90 respectively. Gold remains strongly bullish and can rise further towards $4500-$4550, while Silver continues to strengthen with scope to advance towards $65-$70. Copper has seen a mild recovery but remains vulnerable to a decline towards $6.50-$6.45. Natural Gas remains constructive above the key $2.60 support and can rise further towards $2.80-$3.00 in the near term.

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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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