Morning briefing: Euro can test 1.0650 on the upside

The Dollar Index again fell towards the support near 105.50 on higher private unemployment claims. Still while above 105.50, it can bounce back towards 107-108 in the near term. Euro, if breaks past 1.06, can test 1.0650 on the upside and EURINR can test 90, therein a revised range of 90-88 can hold for some time. Aussie continues to trade near the lower end of its range of 0.6550-0.6400 and Pound needs to see strong break past 1.2750 to head towards 1.28-1.30 in the medium term. Else the range of 1.2450-1.2750 can hold for now. USDCNY has been coming off but while above 7.25, we are retaining our view of seeing a rise towards 7.30-7.35 in the near term. USDJPY needs to rise past 150 again to head towards 152-154 in the coming sessions. EURJPY is rising as expected and if sustained, can extend the rise to 160-162 in the near term. USDINR can test 84.80/83 in the coming sessions. Thereafter, while the resistance holds at 84.83, it can fall back towards 84.60 in the near term. Watch out for the RBI MPC Meeting, US NFP, US Unemployment, US Avg hourly earnings data releases scheduled today.

The US Treasury yields have dipped further. They have to sustain above their upcoming support to rise back immediately. Else, more fall is possible before a reversal is seen. The US NFP and the unemployment rate data release today will be important to watch. The German yields are showing a turn-around. A strong follow-through rise from here can clear the way for more rise going forward. We will have to wait and watch. The 10Yr GoI is inching down in line with our expectation. A further fall is possible before a reversal is seen. The RBI’s monetary policy meeting outcome today will need a close watch.

The Dow Jones failed to sustain above 45000 and dropped below 44800, keeping our bearish view to 43000 intact. DAX and Nifty have risen well above 20350 and 24700. The view remains bullish towards 20500-21000 for DAX and 25000 for Nifty. Nikkei is unable to breach above 39500 and has fallen to 39000. A break below 39000 would extend the downside towards 38500-38000. Shanghai remained flat for a few sessions, failing to breach the resistance of 3380. A confirmed break below 3350 would lead to a further fall to 3300-3250.

Brent and WTI can test their immediate support levels of 71.5/71.0 and 67 in the near term before a bounce takes place. Gold has broken the sideways range on the downside and looks bearish towards 2600. Silver and Natural Gas can rise towards 32.5-33.5 and 3.2-3.4-3.6 respectively. Copper can trade sideways between 4.2-4.0 while below 4.2.

Visit KSHITIJ official site to download the full analysis