Morning briefing: Euro can hold within the 1.1500-1.1800 range

Vikram Murarka Kshitij Consultancy Services

The Dollar Index, Euro and the EURINR can hold within the respective ranges of 97-99, 1.15-1.18 and 102.00-103.50 in the near term. EURJPY can trade within the 174-172 region while the resistance at 174 holds. USDJPY can dip to 147 initially. Only a rise past 149 can bring 150-152 into the picture. USDCNY above 7.13/12 can target 7.16-7.17 in the near term. The Aussie can continue to hold its 0.655-0.640 range, while the Pound can rise towards 1.35 or even 1.36 in the near term. USDINR can rally towards 89 in the coming weeks while above 87.75. US ADP Employment and the US Trade Balance data releases are scheduled today.

The US Treasury yields have come down sharply. Failure to rise back from their immediate support can drag them lower. We will have to wait and see. The German yields have also come down. But supports are there to limit the downside and keep the uptrend intact. The yields can rise back and move higher. The 10Yr GoI is coming down within the range. We keep our bias negative to see a downside breakout of this range eventually. For now the range is intact though.

The Dow is headed towards 46000 while above 44500-45000. The DAX needs to sustain above 23500 to keep the bullish momentum intact; else can become vulnerable to a sharp decline. Nifty rose well on the first day of the GST council meeting but has resistances near 24800/850 and higher at 25000 which need to be broken necessarily to see medium term bullishness. Nikkei is bullish towards 43000 while above 41500. Shanghai seems to be holding well below 3900 and is headed to tets 3700 first. A bounce from there if seen can keep the near term range of 3700-4000 intact. Break below 3700 can be strongly bearish.

Crude prices reversed after reports that OPEC+ may raise output, with Brent holding above $67 and WTI above $63 to keep chances of a rebound towards $70–$72 and $66–$68, though breaks lower could drag them to $64 and $60 respectively. Gold hit a fresh record near $3,640 but needs a break above $3,650 to extend its rally towards $3,700–$3,800, else risks a pullback to $3,400–$3,500, while Silver’s move hinges on sustaining above $42 for a rise towards $43 or slipping back to $40–$41. Copper remains firm with scope to test $4.70–$4.75. Natural gas is gradually inching higher towards $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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