Morning briefing: Euro has seen profit taking near 1.1139

Vikram Murarka Kshitij Consultancy Services

Warmest thanks to all our Morning Briefing readers for being with us on this market journey through the year. We wish you all a Happy New Year in advance and may our new year be filled with financial success and delightful surprises! We will resume our Morning Briefing edition on 2nd January 2024. Till then we can keep the markets aside and keep the holiday mood on!

Profit taking across all markets could be seen today being the last trading day of the year before we go on a weekend holiday mood for the New year. The Dollar Index has bounced back from 100.80 suggesting a false break was seen yesterday below 101 while Euro has seen profit taking near 1.1139, not allowing a rise towards our expected 1.12. EURJPY continues to fall within 159–156 region, while USDJPY appears to be stable above 140-141 and may see a short rise to 142/143 soon. The resistance in Aussie at 0.69 seems to be holding well. Pound could not sustain its rise past 1.28 and has also seen some profit taking. USDCNY is near our mentioned target of 7.09. Need to see if it reverses from here of falls lower towards 7.05. USDRUB has plunged sharply and could test 88-87 before pausing. USDINR on the NDF has come down significantly after a higher close on the OTC markets yesterday. We may expect a rise from 83.10 back towards 83.20 or higher today. After testing 92.66 on the upside, EURINR is again retreating towards 92-91.50.

The US Treasury and the German yields have bounced back. There could be a corrective rise in the near-term. However, strong resistances are there which can cap the upside and keep the overall downtrend intact. The 10Yr and 5Yr GoI have been moving up over the last few days. There is room to rise further before the overall downtrend resumes.

Dow Jones and Nifty have scope to test their key resistance before a corrective fall can happen. DAX and Nikkei appears ranged. Shanghai is bullish for a rise towards 3000.

Crude prices are falling on bumpy year end markets. Tensions surrounding Red Sea shipping, decline in US barrel counts reported by EIA on Thursday and the announcement of Angola leaving OPEC have all pulled down the crude prices. Gold has declined as the resistance at 2100 has held well. Silver has declined towards the lower end of the range. Need to see if it breaks below the lower end of the range or not. Copper is back into its 3.95-3.85 range. Natural Gas looks mixed.

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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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