Morning briefing: Euro has resistance at 1.0550

Vikram Murarka Kshitij Consultancy Services

Dollar Index extended the fall further, but the downside is anticipated to be limited to 105.50. Euro has resistance at 1.0550, below which a range of 1.0550-1.0350 can hold for now. EURINR is rising within its range of 90.50-92.00. USDJPY can remain ranged within 152-148 for now. EURJPY has again declined sharply towards the support around 156 region. Need to see whether it holds or not. AUDUSD on a decisive break below 0.62, can fall towards 0.61. Pound if sustained above 1.26, can head towards 1.28 in the near term. USDCNY on a confirmed break past 7.29, can extend the rise towards 7.30. USDINR has downside limited to 87. On the upside, a rise past 87.50 will be needed to bring 87.80-88.00 into picture.

The US Treasury yields are coming down in line with our expectation. The near-term bearish view is intact, and there is room to fall more from here. The German yields have risen back sharply. The supports have held well as expected. That keeps intact our bullish view to see more rise. The 10Yr GoI sustains its bullish breakout. It can rise more in the coming days.

The Dow Jones has fallen to the lower end of the sideways range of 43000-44000. The view remains bearish towards 42000 and lower. DAX has risen above 23000. While above 23000 holds, extended gains to 23500 and above look possible. So far, Nifty is holding above 22000. It needs a rise past 22500 to mitigate a downside fall to 21700. Nikkei, in intraday, fell below 37000 but currently is trading slightly above 37000; however, while below 38000, a fall towards 36000-35000 looks possible. Shanghai, contrary to our expectations of seeing a rise above 3350 to 3400, fell to 3297 and is moving up towards 3320. A further rise past 3320 would take the index towards 3350.

Crude prices have fallen sharply as OPEC+ confirms an April production increase, and Trump's 25% tariffs on Mexico and Canada come into effect. If the decline sustains, prices could test $68 (Brent) and $65 (WTI) in the near term. Gold and Silver are likely to rise towards $2950 and $32.5–33.5, respectively. Copper may remain within a range of $4.7–4.5 for some time. Natural Gas could rise towards $4.2–4.4 while staying above $4.0.

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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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