Morning briefing: Euro can test 1.0550-1.0600

Vikram Murarka Kshitij Consultancy Services

Dollar Index failed to sustain its rise past 107 and slipped below it. The index can have an upside limited to 108 and either upon testing it or from current levels itself, it can start falling back. Euro if sustains the ongoing rise, can test 1.0550-1.0600 in the coming sessions. EURINR needs to see a decisive break on either side of the range of 88-90 for further directional clarity. Aussie continues to trade below 0.64 but a fall below 0.6350-0.63 is not anticipated. It can bounce back higher upon testing 0.6350-0.6300 on the downside. The Pound can also extend its fall within its earlier range of 1.2750-1.2450 on a confirmed break below 1.26. USDCNY continues to rise further and while above 7.25, the view remains bullish towards 7.30-735. USDJPY and EURJPY are rising as expected but immediate resistances are coming around 155 and 163 regions respectively. Need to see whether it holds and pushes the pair back to previous levels or not. USDINR, for the current week, can trade within 84.85-84.70 region. Broadly a range of 84.90-84.68 can hold till the end of Dec-24.

The US Treasury yields have risen further and are heading up towards their key resistances. The price action after testing this resistance will need a close watch. The US Federal Reserve meeting outcome on Wednesday will be a key event for this week. Their economic projection will be very important to watch. The German yields continue to rise. The outlook is bullish. There is room to rise more. The 10Yr GoI has dipped slightly but can rise back again. There is room to rise in the near-term before a reversal is seen again.

The Dow Jones is bearish towards 43000-42000 while below 44000. Similarly, DAX could rise towards 20700-21000 while above 20200. Nifty plunged to 24200 followed by a reversal above 24700. While it sustains above 24700, a rise towards 25000 looks possible. The Nikkei is steady at around 39,500, with the immediate outlook remaining uncertain. A break above this level could lead to a rise toward 40000, while a dip could push it down to 39000. Shanghai trades below 3400 and keeps our view bearish, targeting 3350-3300.

Brent and WTI have moved up and can target 75.5-76.0 and 72.5-73.0 respectively. Gold, Silver and Natural Gas have fallen. A broad range of 2600-2750, 30.5-32.5, and 3.2-3.6 can hold for the upcoming weeks. Copper looks bearish towards 4.10-4.05 while below 4.20.

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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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