Morning briefing: Euro can trade within 1.0800-1.0950 region for a while

Vikram Murarka Kshitij Consultancy Services

Christine Lagarde, President of the European Central Bank (ECB) stated that economic growth could fall by half a percentage if the tariffs were imposed and retaliated against. This led Dollar Index to initially rise past 104 before coming down. The lower targets of 103-102 are kept open in Dollar Index, while it trades below 104. The Euro can trade within 1.080-1.095 region for a while. EURINR has immediate support near 93.50, above which it can rise back towards 95. USDJPY, USDCNY, AUDUSD & Pound can trade within respective ranges of 148-150, 7.22-7.26, 0.64-0.62 and 1.30-1.29 in the near term. EURJPY above 160, can attempt to rise back towards 164. USDINR below 86.50, can be vulnerable to fall towards 86.00.

The US Treasury yields remain lower. The view is bearish to see more fall. The German yields have dipped further. They are on a corrective fall now. But supports are there to limit the downside and keep the broader uptrend intact. The 10Yr GoI is coming down in line with our expectation and is keeping intact our bearish view.

The Dow Jones closed flat, and while below 42100, the outlook remains bearish towards 40000-39000. DAX has fallen below 23000, and is expected to hold the range of 22000-23500 and possibly witnessing a fall within this range. Nifty has risen above 23100, Further, rise towards 23500 looks possible. Nikkei heading towards testing the mark of 38000. Shanghai has risen from a low of 3401 and is attempting a rise towards 3430-3450.

Brent and WTI have risen as expected and may remain within their previous mentioned ranges for some time. Gold, Silver and Copper faces near term resistance which needs to be broken to move higher in the coming weeks, else remains vulnerable for a fall. Natural gas has dropped below $4.00 and may decline further, but a rebound above could revive our earlier bullish outlook.

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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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