Morning briefing: Euro has moved up a bit and can re-test 1.1400

Vikram Murarka Kshitij Consultancy Services

The Dollar index has dipped below 101.50 while Euro has moved up a bit and can re-test 1.14. But whether it would break higher and sustain needs to be seen. EURINR is holding well above 107 and needs to rise back above 108 to rise further. EURJPY has also risen well from 183. The rise of continues can take it slowly towards 184-185 or higher. USDJPY may hold between 162-161 in the near term. USDCNY, if breaks above 6.80 can move up towards 6.83/85. Aussie is expected to rise from current levels while Pound needs to bounce from 1.32 to avoid further decline from here. USDINR may cap it's upside to 95/95.10 while a fall to 94.05-93.85 is likely on a break below 94.15.

The US Treasury Yields have declined sharply and are trading below their support. Failure to rise back immediately can drag them lower in the coming days. The German Yields have come down as expected and are at their support. An extended fall looks likely before a sustained reversal is seen. The 10Yr GoI has declined below our expected levels. There is support near current levels. We can expect the yield to bounce back. We will have to wait and watch.

Dow remains below the key 53000 resistance and is vulnerable to a decline towards 51000-50000 unless it breaks higher. DAX also remains weak below 25500 and can decline further towards 24500-24250. Nifty needs to hold above 24000 to keep the recovery towards 24200-24400 alive. Nikkei and Shanghai have corrected sharply and can test supports near 68000-67500 and 4000-3950 respectively before a bounce back is seen.

Brent and WTI remain weak and can test $70 and $65 respectively before a corrective bounce back is seen. Gold has rebounded after holding above the key $4000 support and can rise towards $4100-$4150. Silver has bounced from support near $55 and can extend its recovery towards $65-$70. Copper has also recovered after holding above $5.90 and can rise further towards $6.25-$6.30. Natural Gas continues to trade within the broader $3.00-$3.50 range.

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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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