Morning briefing: Euro can rise towards 1.1250/1.1300

Vikram Murarka Kshitij Consultancy Services

The Dollar Index, after the Jackson Hole meeting came off sharply as Powell signaled a rate cut in the Fed’s Sep-24 meeting. Crucial supports are seen at 100.50 and lower at 99.50 which can hold in the near term. Euro on the other hand can rise towards 1.1250/1.13.00 before possibly topping out. USDJPY and EURJPY if break below current levels, can be bearish to 142/140 and 160/158 respectively in the coming sessions. The pound has risen past 1.32 but a decisive break past 1.3250 will be needed to become further bullish. Aussie has surged significantly as well and now, a confirmed break past 0.68 can take it higher towards 0.6850. USDCNY looks bearish to 7.10/08 in the near term. EURINR is nearing the target of 94. USDINR may continue to trade within 84.00-83.75/70 region for the near term.

The US Treasury yields have come down sharply on Friday following the Fed Chairman Jerome Powell’s speech at the Jackson Hole meeting. The bearish view remains intact, and the yields can fall more from here. Powell said that the time has come for the policy to adjust. So, a rate cut now in September is a given. The German yields remain stable. Any rise from here will be capped. The trend is down, and the yields are likely to fall back again. The 10Yr GoI is attempting to bounce. But resistances are there to cap the upside and keep the overall downtrend intact.

Strong rise seen in Dow Jones after Powell's remark that "the time has come for policy to adjust". Dow looks further bullish from there. DAX has entered into its key resistance zone. Need to see if it fallbacks from here or breaks higher. Nifty remain bullish for the near term. Nikkei lacks a follow through rise but has near term support, while above which, the outlook remain bullish. Shanghai remains vulnerable for a fall towards 2800.

Crude prices have scope to target their immediate resistance in the near term. Gold, Silver and Copper have bounced back well contrary to our bearish view and may look to rise more from here. Natural gas might trade within 2.0-2.3 for some time.

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.

AUD/USD meets fresh supply and tests 0.7100 amid weak Australian PMIs

AUD/USD has come under fresh selling pressure and is testing 0.7100 in the Asian session on Wednesday. Australia's flash PMIs showed manufacturing slipped into contraction and services expanding slowly for a second straight month, renewing the pair's downside. Furthermore, a bullish US Dollar acts as a headwind for the pair as traders keenly await the crucial Trump-Xi summit on Thursday. Meanwhile, markets shrug off US-Iran indirect talks.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold sticks to losses below $4,350 as USD buying remains unabated amid hawkish Fed

Gold struggles to capitalize on the previous day's goodish rebound from sub-$4,300 levels and meets with fresh supply during the Asian session. The US Dollar extends its recent uptrend, hitting a fresh high since July 30 amid the Federal Reserve's hawkish outlook. This, in turn, is seen as a key factor undermining the non-yielding bullion.

Cardano Bulls push higher as open interest, funding rates rise

Cardano (ADA) extends gains, trading above $0.262 after rallying more than 14% so far this week. The bullish momentum is supported by rising Open Interest (OI), positive funding rates and signs of whale accumulation. If buying pressure persists, ADA could extend its rally and target higher levels. Cardano’s derivatives metrics show strengthening conditions.

Trump meets Xi: Why markets are watching this summit so closely

United States President Donald Trump and Chinese President Xi Jinping are set to meet in Washington on Thursday for a summit closely watched by markets. After several months of easing trade tensions between the US and China, the meeting could determine whether the world's two largest economies extend their truce or enter a new period of uncertainty.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.