Morning briefing: Euro can target 98.00-96.00 and 1.15-1.16 respectively
Dollar Index and Euro can target 98-96 and 1.15-1.16 respectively. EURINR, above 97/96 looks bullish towards 99-100 levels. EURJPY is likely to hold the range of 165-160 region. USDJPY below 145, can fall back towards 142 or even 140 before halting. AUDUSD is nearing the upper end of its 0.6400/635-0.6500 range, Pound on the other hand looks stable within 1.34-1.36 range. The USDCNY below 7.20/17 can extend the fall towards 7.17/15 in the near term. The USDINR above 85.50 has a scope to rise back towards 86.
The US Treasury Yields have risen sharply on Friday after the jobs data release on Friday. If this rise sustains, the yields can move further higher to test their resistance. However, we expect them to reverse lower again thereafter. The German Yields remain stable. Key resistances are ahead which have to be broken to move higher and avoid falling back. The 10Yr GoI has risen back well after a sharp fall following the RBI meeting on Friday. A strong follow-through rise above the immediate resistance can trigger a relief rally going forward. The RBI had cut the repo rates by 50 bps.
The Dow rose sharply on Friday after a higher than expected NFP data release. The index can head towards 42500 in the near term a break past which will be needed for further bullishness. Dax is likely to remain ranged within 24500-24000 for the near term. Nifty closed higher last week and would strengthen its bullishness on a break past 25200. Nikkei and Shanghai trade higher today. Further bullishness may continue on a sustained rise past 38500 and 3400 respectively.
Crude prices rose on strong US payroll data and easing US-China tensions, but both face key resistance at $68 (Brent) and $65 (WTI) respectively, below which pullbacks are possible. Gold dipped below $3,400 but may rebound if it holds above $3,300. Silver is testing crucial resistance near $36.20, with a potential pullback unless it breaks higher towards $40. Copper is weakening towards $4.75 before a possible rebound to $5.00. Natural Gas has bounced as expected and may rise further towards $3.9–$4.0.
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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.
