Morning briefing: Euro has risen to 1.1100

Vikram Murarka Kshitij Consultancy Services

Markets seem to be placing bets on 6-rate cuts by FED in 2024 as the sentiment for the first rate cut in March intensifies, dragging down the Dollar Index to levels below 101. Euro has risen to 1.11+ which if sustains can rise to 1.12 before falling from there. EURJPY fell from 158.56 and could be headed towards 157/156 now while USDJPY is falling towards 141 as expected. Aussie is bullish towards 0.69 from where a rejection is possible. Pound continues to slowly inch higher breaking above 1.28 and could test weekly resistance near 1.29 before coming off. USDCNY fell towards 7.10/09. An immediate range of 7.09-7.15 may hold. USDRUB is fluctuating within the 94-89 region as expected. USDINR may appreciate within the 83.00-83.40 region. EURINR trades above 92 on higher Euro. It may rise higher for some more time before falling back to 92 or lower.

The US Treasury yields continue to fall. Bearish view is intact and more fall is on the cards. German yields have declined sharply and are coming down in line with our expectation. View remains bearish. The 10Yr GoI is on a corrective rise. Resistance can cap the upside and keep the downtrend intact. The 5Yr GoI is stuck inside its narrow range. Bias is negative for the yield to break the range on the downside and fall more.

Dow Jones continues to rise and remain bullish to target new highs. DAX is bullish as long as it holds above 16600-16500. Nifty has some resistance ahead which, if breaks, can extend the uptrend further. Shanghai has bounced back sharply towards the upper end of range and a break on the upside, if seen, can be bullish further in the coming sessions. Nikkei can be range bound for a while.

Crude prices have fallen back but could get support at $78 and $72 respectively. Gold has entered into the key resistance zone. Silver has risen within its sideways range and needs a decisive break on the upside to strengthen the bullish momentum. Copper has broken above its upper end of the range to target its key resistance as expected. Natural Gas could be range bound while below 2.60.

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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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