Morning briefing: Euro has a scope to rise towards 1.1800
The Dollar Index is trading near the 98 level, any break below which if seen can drag it to 97-96 as well. The Euro has a scope to rise towards 1.18 while above 1.16. EURINR needs to rise past 102.50 to bring 103-104 into picture. EURJPY & USDJPY needs to break past 172.20 and 148 to head towards 174/75 and 150 respectively in the near term. USDCNY is trading higher within its 7.14-7.20 range. The Aussie has risen past 0;65 and if sustained, can head towards 0.66, while the Pound can soon test the resistance at 1.3450. USDINR is trading lower at the NDF. While below 88, a fall to 87.25 or lower is possible.
The US Treasury yields remain lower. The bias is negative to see more fall. Resistance is there to cap the upside in case a rise happens. The German yields have dipped. But support is there to limit the downside and keep the bullish view intact. The yields are likely to rise back again. The 10Yr GoI has come back into its range again. Failure to rise back can keep it inside the range for some more time again. The RBI kept the repo rates unchanged at 5.5% in its monetary policy meeting yesterday.
Stock markets are mixed today. The Dow Jones has dipped while the Dax has risen in news of Trump and Putin to meet in the coming days. Dow and Dax can soon target 44500-45000 and 24000-24500 respectively in the near term. Nifty is likely to hold above 24400 and move up towards 24800-25000 in the coming days. Nikkei and Shanghai may continue to rise towards near term resistances near 42000 and 3700 respectively. Nikkei could have scope to extend beyond 42000 on a confirmed upside break.
Brent and WTI are declining and may fall further towards $64–$62 and $62–$60 respectively. Gold has turned bullish after breaking resistance and could target $3550–$3600. Silver may rise towards $39–$40, while Copper is likely to remain range-bound between $4.3–$4.5. Natural Gas could test $3.2 before dropping below $3.
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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.
