Morning briefing: Euro can rise towards the resistance near 1.1600/1.1700

The US struck three nuclear sites in Iran and warned of greater consequences if Iran retaliates. The Dollar Index needs to see a sustained rise past 99 to assume that a fresh rally has begun. Else, it is likely to fall back towards 98.00-97.50. Euro and EURINR can rise towards the resistance near 1.16/17 and 100.00-100.50 region respectively. EURJPY has risen as anticipated and if sustained, can test 170 in the near term. USDJPY indeed rose past 146 but is unable to sustain above it. If the fall continues further, the pair can fall back within 146-144/42 range. USDCNY can continue to trade between 7.17/16-7.20 region in the near term. The Aussie and Pound are likely to remain ranged within 0.6350-0.6550 and 1.33-1.36 regions respectively, before a break happens on either side. USDINR can either head towards 87.00-87.20 or fall below 86.50. Which will happen will have to be seen. US Existing Home Sales data release is scheduled today.

The US Treasury yields remain stable at the middle of their range. The yields can sustain in the range for some more time. But the bias is negative to see a downside break of this range eventually. The German Yields remain stable. The upside is capped from here. The yields are likely to fall back in the coming days. The 10Yr GoI remains higher near the upper end of its range. We expect the yield to break the range on the upside eventually and rise more.

Equities could decline following the US bombing on Iran as the market await the next steps from Iran. Dow and Dax had closed higher on Friday but could face a decline today. Failure to hold above 42000 and 23000 in the near term can drag them down to 41000 and 22500, respectively. Nifty could remain ranged within 24400/800-25200 for some time while Nikkei can trade within 38500-37000 region. Shanghai needs to sustain above 3350 to move back towards 3380/3400. Else can decline to 3300 soon. Watch price action at 3350.

Crude prices surged amid heightened Middle East tensions, with Brent and WTI testing key resistance levels that, if breached, could push prices to $85–$90 and $80–$85 respectively. Gold remains weak below $3,400, with potential to fall to $3,300. Silver found support near $35 and may rebound to $36.50–$37. Copper is range-bound between $4.75–$5.00, while Natural Gas holds above $3.80 and may rise towards $4.10–$4.20.

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