Morning briefing: Euro can head towards 98.00-96.00 and 1.1400-1.1500 respectively in the near term

Vikram Murarka Kshitij Consultancy Services

The Dollar Index and Euro can head towards 98-96 and 1.14-1.15 respectively in the near term. EURINR is rising as anticipated and the targets of 97-98 can be achieved in the near term. EURJPY on a break below 162 can test 160 on the downside. Overall, it can broadly remain ranged within 165-160 region. USDJPY has slipped below 144 and if the fall persists, can get extended to 142-140 in the coming sessions. AUDUSD continues to trade within the range of 0.635-0.650 for a while. The USDCNY has slipped below 7.20 and the targets of 7.18/15 can be achieved if the fall continues. Overall, the view remains bearish below 7.23. Pound needs to rise past 1.35 to maintain bullishness, else while the resistance holds, a fall back towards 1.32-1.31 can happen. The USDINR can trade within narrow range of 85.25-85.75 and a broad range of 85-86 for a while. US Existing Home Sales data release scheduled today.

The US Treasury Yields have risen sharply and are showing strength. That keeps the bias positive. We can expect the yields to move further higher in the coming days. The German Yields have moved up as expected and are keeping intact our broader bullish view. The yields can rise more from here. The 10Yr GoI is coming down as expected. The bearish view is intact and more fall is on the cards.

Concerns over a rise in the federal deficit led to a plunge in the Dow Jones after a disappointing 20-year Treasury note auction was seen yesterday. The index could drag itself down towards 41000 on a break below 41800. Watch price action at 41800. Dax, Nifty, and Shanghai have risen and could test 25000, 25000-25200/400, and 3400 respectively. Nikkei has fallen sharply to 37000, and if it breaks below this level, it can have room to fall further towards 36000 in the coming days.

Crude prices can rise towards $68–$70 (Brent) and $65–$66 (WTI) respectively. Gold continues its upward trend towards $3,400–$3,450, while Silver nears key resistance at $34, a breakout could open room for $35–$36 on the higher side. Copper is at resistance near $4.70 and may decline to $4.40–$4.50 unless it breaks higher towards $4.80–$5.00. Natural gas faces resistance near $3.50, with a breakout targeting $3.60–$3.80, or a fallback to $3.10–$3.20.

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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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