Morning briefing: Euro could fall to 1.0850 on resistance hold

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has risen well and can test 103.80-104 in the coming sessions before topping out. On the other hand, Euro is near the immediate resistance around 1.0950/60 which if holds, can push the pair down towards 1.09-1.0850. USDJPY and EURJPY may soon test our mentioned targets of 148-150 and 161/163 respectively while within an overall downtrend. Pound is nearing towards the immediate resistance around 1.2750/28 which if holds, can drag the pair down towards 1.26, while the Aussie needs to break above 0.66 to turn bullish. USDCNY is headed towards 7.20. EURINR could test the supports near 91.50 and 91 before possibly bouncing back towards 92. USDINR has crucial resistance at 84; need to see whether the resistance holds or not. Watch price action closely around the current levels. Any pullback can drag it down to 83.80.

The US Treasury yields have come closer to a key resistance. We expect the yields to turn down and resume the fall. A sustained break above the resistance will only negate the bearish view. The German yields remained stable and higher. The overall view is bearish and any rise from here will be short-lived. The 10Yr and 5Yr GoI have bounced but may not sustain higher. Though there is some room to rise from here, the yields are likely to reverse lower again and resume the fall. The RBI kept the repo rates unchanged at 6.5% in its policy meeting yesterday.

Decent rise/recovery is seen in most of the equities after US Unemployment Claims came out lower than expected, indicating a resilient labour market thereby easing fears about the economy concerns. Nifty is stuck in a narrow range. Shanghai can target its immediate resistance in the near term before resuming its downtrend.

Brent and WTI continue their uptrend and can potentially target $78-80 and $80-82. Gold, Silver and Copper have recovered a bit after US Unemployment Claims fell to 233K than the market expectation of 241K which was a hawkish case for Fed rate policy. Natural Gas can continue to rise further towards 2.2-2.4.

Visit KSHITIJ official site to download the full analysis

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.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold sticks to a negative bias below $5,000; lacks bearish conviction

Gold remains depressed for the second consecutive day and trades below the $5,000 psychological mark during the Asian session on Tuesday, as a positive risk tone is seen undermining safe-haven assets. Meanwhile, bets for more interest rate cuts by the Fed keep a lid on the recent US Dollar bounce and act as a tailwind for the non-yielding bullion, warranting caution for bearish traders ahead of FOMC minutes on Wednesday.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

US CPI is cooling but what about inflation?

The January CPI data give the impression that the Federal Reserve is finally winning the war against inflation. Not only was the data cooler than expected, but it’s also beginning to edge close to the mystical 2 percent target. CBS News called it “the best inflation news we've had in months.”

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.