Morning briefing: Euro declines towards 1.1700
The DXY has risen as expected and could test 98 while the Euro is declining towards 1.17. EURINR could continue to dip towards support near 107-106.50. EURJPY can test 184 a break above which is needed for a further rise to 186. USDJPY has moved up well and can test 156. USDCNY is stuck just above 6.90 and may continue so with immediate upside limited to 6.92. The Aussie can test 0.70/69 while below 0.7150 while the Pound can test 1.34/1.3350 before pausing for a bounce. USDINR rallied to 91.18 on the NDF and needs to see if such a rally is seen today on the Onshore which could open chances of 91.25/91.50. Else the earlier range of 90.80-90.40 could continue to hold today.
The US Treasury yields have come off from their highs. That keeps the downside open to fall more before a reversal happens. The US PCE data release today will need a close watch. The German Yields remain stable and range bound. The near-term picture is weak. The yields have room to fall more from here. The 10Yr GoI is holding well above its supports. We can expect the yield to rise in the coming days. Support is there to limit the downside.
Global markets are mixed. The Dow is holding above support and can move up towards 49800–50000. DAX has fallen from recent highs but can recover towards 25300–25500 as long as it holds above 24900–24800. Nifty has reversed lower but can bounce towards 25600–25800 while above 25300, else it may slip to 25200–25000. Nikkei remains weak with downside towards 56150–56000. Shanghai is closed for the holiday and will reopen on 24-Feb-26.
Brent has risen on geopolitical risks and needs to sustain above $72 to move towards $74–$76. While WTI must hold above $66 to extend gains towards $68–$70. Gold is likely to stay range-bound between $5100–$4800 and Silver between $80–$70 in the near term. Copper has bounced from support, but a break above $5.8 is needed for a rise towards $6.0–$6.2. Natural Gas looks weak, and a sustained break below current support can drag it lower towards $2.7–$2.6.
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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.
