Morning briefing: Euro is declining as expected and can soon test 1.1100

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has recovered well from the support around 100.50. Watch US GDP data release scheduled today. Euro is declining as expected and can soon test 1.11. USDJPY can fall back towards 142-140 in the near term below 145, while EURJPY can remain ranged within 160-164 for a while. The pound is holding well below our mentioned resistance of 1.3250 for now and is likely to fall towards 1.31 or lower. Aussie failed to sustain its rise past 0.68 and is currently moving within a narrow range of 0.6850-0.6750. USDCNY can remain ranged within 7.12-7.18 region above 7.12. EURINR can fall back towards 93 in the coming sessions before attempting to rise back. USDINR may continue to trade within 83.75 -84.00 region for the near term.

The US Treasury yields remain stable. The broader view is bearish and there is room to fall more from here. Any rise will be capped and short-lived. The German yields have turned down and resumed their downtrend. The bearish view remains intact. The 10Yr GoI is higher but stable. Resistances ahead can cap the upside and drag the yield lower again. The broader view remains bearish.

Dow Jones has fallen a bit but while above the support at 40800, view remains intact to see a rise towards 41800-42000. DAX has broken above its the resistance and while this break sustains, a further rise could be seen in the coming sessions. Nifty remains positive to target 25500 in the near term. Nikkei remains stuck in a narrow range but broader view is bullish to see a break on the upper end of the range. Shanghai has fallen below 2840 and can now fall towards 2800-2775.

Crude prices and Natural Gas are likely to trade sideways for a while. Gold, Silver and Copper fell sharply yesterday but have their immediate support levels, while above which, they can potentially rise towards 2600, 31.5 and 4.4 respectively.

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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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