Morning briefing: Euro can trade within 1.1125 – 1.0950 region

Vikram Murarka Kshitij Consultancy Services

Many important data releases are due this week that could keep the currencies volatile; the most important being the central bank policy meetings from the FED, BOE and BoJ on 18th, 19th, and 20th of September respectively. Among the other data releases, we have the US IIP, EU CPI, and Japan CPI that would be important to watch. The Dollar Index could test 100.5 before rising to 102 later. Only a break below 100.5 will bring in 99.5 into the picture. Euro can trade within 1.1125-1.10/1.0950 region for now. USDJPY and EURJPY continue to fall and could test 139-138.40 and 154 respectively before a possible halt. Aussie and Pound are in a short corrective rise but could be bearish while below 0.68/6850 and 1.32. In the medium term, a fall to 0.65/64 (Aussie) and 1.30/29 (Pound) looks likely. USDCNY could extend its fall to 7.05/02 on a break below 7.08, if seen. Resistance at 7.12 seems to be holding well for now. EURINR has risen past 93 but needs to sustain to rise towards 93.50/94 else can fall back towards 92.40-92.00. USDINR can continue to trade between 83.80 and 84.00, both being immediate support and resistance levels.

The US Treasury yields remain lower. The view remains bearish and there is room for the yields to fall more from here. The German yields remain stable after the bounce on Thursday. Resistances ahead can cap the upside and keep the broader downtrend intact. The Indian 10Yr GoI continues to fall in line with our expectation. The downtrend is intact. and the yield can fall more.

Dow Jones and DAX continues to rise and can extend the rise to 41700-42000 and 19000. Nifty has dipped slightly but chances of seeing a rise to 25700-25800 will remain intact while above 25000. Nikkei and Shanghai are closed today.

Brent and WTI have declined and might trade sideways for a while if they fails to break above the resistance $74-75 and $70-71 respectively. Gold has key resistance overhead which can halt the current rally and lead

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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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