Morning briefing: Euro can test 1.1700

Vikram Murarka Kshitij Consultancy Services

The forex market appears to be driven by the plunge in USDJPY, which has dragged the Dollar Index lower while the other currencies strengthen against the US Dollar. Euro can test 1.17, EURINR is headed towards 112.50, and USDCNY can test 6.70, while Aussie and Pound look bullish for the near term. USDINR rose to close above 94.80 yesterday. Sustained rise could push it towards 95.00–95.25 before pausing for a reversal.

The US Treasury Yields remain higher and stable. The outlook remains bullish to see more rise. Support can limit the downside from here. The German Yields have dipped slightly. They need to rise back and get a strong follow-through buying to go higher. We will have to wait and see. The 10Yr GoI has dipped slightly. Support is there to limit the downside and keep alive the chances of rising back again.

Dow remains weak below 53000 and can dip towards 52500 before consolidating within 52500-54000. DAX remains uncertain for now. Nifty needs to hold 23600 for a recovery towards 23800. A break below 23600 could extend the decline towards 23500. Nikkei remains positive above 64000 and can rise towards 67000-68000. Shanghai remains range-bound between 3850-4000 while below 4000.

Brent and WTI have reached the mentioned levels as expected, with a break above $100 and $95 respectively opening the way towards $110 and $100. Gold remains positive above $4300 and can rise towards $4600. Silver needs to sustain above $70 for a move towards $75-$80. Copper remains weak below $6.80 and can dip towards $6.70-$6.60. Natural Gas remains range-bound between $2.80-$3.00 while below $3.00.

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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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