Morning briefing: Euro can fall back towards 1.1150-1.1100 in the near term

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has risen a bit after the US Durable goods came stronger at 9.9%. Now we need to see as to whether the rise extends further to 101.50-101.75 or not. PCE inflation — the Fed's favored gauge of price growth — is due on Friday. Euro can fall back towards 1.1150-1.11 in the near term while below 1.1250/1.1300. USDJPY needs to rise past 145 to turn bullish again while EURJPY can remain ranged within 160-164 for a while. The pound is holding well below our mentioned resistance of 1.3250 and can fall towards 1.13 or lower soon. Aussie failed to rise past 0.68 and a break below 0.6750 can trigger a fall to 0.67-0.6650. USDCNY needs to sustain above 7.12 to rise back towards 7.18. EURINR can fall back towards 93-92 in the coming sessions while below 94. USDINR may continue to trade within 84.00-83.75 region for the near term.

The US Treasury and the German yields have bounced slightly. But this is likely to be short-lived. Resistances are there on both the yields to cap the upside in case of a corrective rise. The broader view continues to remain bearish. The German and Treasury yields are likely to fall back and resume the downtrend going forward. The 10Yr GoI remains lower and stable. The bias is negative to break the support and fall eventually.

Dow Jones and Nifty have room to rise towards 41800-42000 and 25500. DAX is holding below its resistance for now. A clear break above its resistance is needed for increased bullishness or else it could fallback. Nikkei sustains above its support and while above it, the near term view remain bullish. Shanghai outlook remains bearish for a fall towards 2800.

Crude prices have risen well and looks further bullish for the near term. Gold and Silver have dipped slightly but chances of rise towards their key resistance will remain intact as long as they holds above the immediate support. Copper remains higher and looks bullish towards 4.4. Natural gas to remain range bound within 2.0-2.3 for some time.

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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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