Morning briefing: Euro has interim resistance at 1.0450

Vikram Murarka Kshitij Consultancy Services

Europe is taking the lead in a renewed push for peace in Ukraine. As a result, Dollar Index has declined a bit. Overall, downside could be limited to 106.00-105.50 and a rise past 107.70 will be needed to head towards 108. Euro has interim resistance at 1.0450, break past which can only bring 1.0500-1.0550 into picture. EURINR is holding its range of 90.50-91.50/92.00. USDJPY has limited upside to 151-152 and possibility of it falling back towards 148 is kept open for now. EURJPY has risen past 156 again and if sustained, can extend it further to 158 or even 160 as well. AUDUSD and Pound can fall towards 0.62/61 and 1.25 respectively in the near term. USDCNY on a break past 7.29, can extend the rise towards 7.30. USDINR is trading lower on the NDF. A rise past 87.50 can take it higher towards tested 87.40 on the upside. Now a break past 87.50 if seen, can take it higher at 88. Else, can fall back towards 86.90. US Manufacturing ISM and IN Manufacturing PMI data releases scheduled today.

The US Treasury yields remain lower. The near-term outlook is bearish. The yields can fall more from here. The German yields hover above their key support. We expect the support to hold and the yields to rise in the coming days. The 10Yr GoI has finally made the much-expected bullish breakout. More rise is on the cards now.

The Dow Jones is nearing 44000. A rise past 44000 would negate the view of seeing a fall below 43000 to 42000 and possibly target 45000. Wait and watch price action near 44000. The DAX is holding the range of 22000-23000. The bias remains bullish to see a rise past 23000. Nifty has fallen below 22500. While below 22500, a fall towards 22000-21700 looks possible. Nikkei has risen; however, while below 38000, the outlook remains bearish towards 36000-35000. Shanghai, as expected, had come down to 3318; now it's heading towards 3350. As long as 3320 holds, a rise towards 3400-3450 remains on the table.

Crude prices are holding above their immediate support levels and are expected to remain within a range of $76-$72 (Brent) and $72-$68 (WTI) for some time. Gold has fallen below $2900 but has support near $2850, which could hold and push the price back towards $2900-$2950 in the near term. Silver and Copper are likely to rise towards $32.5-$33.5 and $4.7-$4.8 respectively, as long as they remain above $31 and $4.5. Natural Gas appears to be bearish and could fall towards $3.6-$3.4.

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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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