Morning briefing: Euro heads toward the 1.1550 level

Vikram Murarka Kshitij Consultancy Services

The Dollar Index and Euro are headed toward the crucial levels coming at 99.50 and 1.1550 respectively. On a break below 101.50 EURINR can get dragged towards 101-100. EURJPY & USDJPY can target 178-180 & 153-154 in the near term. USDCNY continues to consolidate between 7.12-7.14. The Aussie is holding the 0.655-0.645 range quite well for now. The Pound is nearing the support around 1.3300-1.3270. Need to see whether the pair bounces back from the support or extends the fall further. USDINR remained closed yesterday.

The US Treasury yields remain lower. There is room to fall more to test their key supports. Thereafter the yields can rise back again. The German yields are coming down again failing to sustain the bounce seen earlier in the week. They can fall more in the coming days. The 10Yr GoI is stuck inside a narrow range. The immediate outlook is unclear. We will have to wait for the range breakout.

The Dow fell sharply yesterday and can test 46000 before rising again towards 47000. Dax has also dipped and needs to sustain above 24000-24500 to move up towards 2500-25200. Else the index can fall to 23500-23000. Nifty has dipped after a decent rise in the past few sessions. Some chances of a rise to 26000 is there but we remain cautious because a decline if seen from here can turn bearish towards 25500 or lower. Nikkei can test 48000-47000 while below 50000. Thereafter a bounce from 470000 can take it back towards 50000. Shanghai is likely to remain range-bound between 4000-3800.

Brent rebounded from $60.07 but faces resistance at $64, with scope to dip towards $62-60 unless it breaks higher. WTI shows similar resistance at $60, which if breached could rise towards $62-64. Gold fell sharply from $4400 to $4021 but may rebound towards $4150-4200 while above $4000. Silver plunged from $53.77 to $46.82 and could bounce towards $48-49 while holding above $46.50. Copper remains range-bound between $4.9-5.2. Natural Gas faces resistance near $3.6, with support at $3.2-3.0 unless a breakout lifts it towards $3.8-4.2.

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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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