Morning briefing: Euro can head towards 1.1600-1.1800

Vikram Murarka Kshitij Consultancy Services

The Dollar Index on a confirmed fall below 99 can open the doors for 98-96. The Euro on an immediate break past 1.14 can head towards 1.16-1.18. EURINR has immediate support near 94.50, above which it can bounce back towards 96.50. EURJPY and USDJPY are back within their old range of 164-160 and 145-140 respectively. AUDUSD has risen past 0.645 and can head towards 0.66. The USDCNY while trades above 7.25, a rise to 7.28/30 is possible. Pound can trade within 1.35-1.32 region for a while. USDINR faces immediate resistance at 84.70/80, below which it can again fall back towards 84 or lower.

The US Treasury and the German yields have risen sharply on Friday. A strong follow-through rise from here can take the Treasury yields further higher in the coming days. The German yields on the other hand have an immediate resistance. While that holds, they can fall back and keep the broader downtrend intact. The 10Yr GoI remains stuck in a narrow range. We will have to wait for the range to breakout on either side.

Dow Jones has risen well above 41000 and can rise towards 42000/43000. Dax is bullish for a rise to 23500 a break above which would open door for a further rise towards 24500-24800. Nifty needs to rise above 24400 to head towards 24700/25000 else a correction towards supports at 24200/23900 can be possible. Nikkei and Shanghai are closed for the day for Children’s Day and Labor Day respectively.

Crude prices have declined sharply as OPEC+ agrees another accelerated oil output hike for June, the prices remains bearish for the near term. Gold remains weak below $3,300 with a potential drop to $3,100, while Silver could test $31.5 before rebounding. Copper has bounced from $4.52 and may rise towards $4.80–$4.90. Natural gas has surged past $3.45, with potential to move up to $4.00 in the coming weeks.

Visit KSHITIJ official site to download the full analysis

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.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.