Morning briefing: Euro has support at 1.1700

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has resistance at 98 and the Euro has support at 1.17 which need to hold for them to test 97-96 and 1.18-1.19 respectively. Else, if Euro falls further to 1.17, the Dollar index can briefly break above 98. EURINR is headed towards support at 103 from where a bounce looks possible towards 104.50, keeping a near term range of 103-104.50 intact. EURJPY and USDJPY have resistances near 174.50 and 148.50 respectively from where declines look possible towards 173-172.50 and 147-146 respectively. USDCNY is extending its rise towards 7.125 or higher, while the Aussie has broken below 0.66 and looks vulnerable to a further dip towards 0.6550. The Pound is holding above support at 1.3450, but a sustained break lower could drag it down to 1.34–1.3350. USDINR is trading firm above 88 with scope to rise towards 88.25–88.35, and a break past 88.35 could open the way for 88.50–88.75.

The US Treasury yields have risen further. There is room to rise more and test their resistance. The price action thereafter will need a close watch to see if the yields are turning down or extending the rise. The German Yields are coming close to their resistance. If they manage to breach the resistance, the broader uptrend can then resume without seeing the fall that we have been expecting. The 10Yr GoI has come down again. The yield remains stuck inside the narrow range and continues to oscillate within it.

Most indices have immediate resistances and can see an initial dip before resuming the longer term uptrend. The Dow has risen well but needs to break above resistance at 46500 to turn further bullish for the near term else can dip back towards 45500-45000. The DAX has immediate resistance at 24000 below which an initial dip is possible to 23500-23000. Nifty has crucial resistance at 25500 which needs to be breached to establish a bullish momentum for the coming weeks else can see a dip toward 25000-24800 again. Nikkei needs to breach 45860 to rise towards 46000 while Shanghai has dipped below earlier support at 3850 and can test 3800-3750 before again moving higher in the longer run.

Brent and WTI remain weak below $68 and $63, leaving them vulnerable to further declines towards $65–64 and $60 respectively. Gold has rebounded above $3,700 and looks set to rise towards $3,750–3,800. Silver has surged sharply with resistance at $44, a break of which could open the way towards $44.50–45.00 in the coming weeks. Copper is holding above $4.60, with risks of a fall to $4.55 if broken, else it may bounce towards $4.70–4.75. Natural Gas has extended its decline as expected and could dip further towards $2.80 in the near term.

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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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