Morning briefing: Euro is headed towards 1.1600

Vikram Murarka Kshitij Consultancy Services

Softer US data releases last week have weighed on the Dollar Index, taking it lower. A break below 99.40, if seen, can drag it further towards 99 or lower in the medium term. That said, most currencies are looking strong against the US dollar. Euro is headed towards 1.16, while EURJPY looks headed towards 185/186. Yen and Yuan trade strong and can soon target 158 and 6.70 respectively. Aussie and Pound can target 0.7120 and 1.36/37 respectively. USDJPY could trade lower as long as the Dollar Index trades lower. EURINR has risen above 110.40 and can target 111 or higher in the near term. USDINR too can dip while below 95.50 and test 95.20.

The US Treasury Yields have bounced back well from their support zone. That keeps intact our bullish view. The yields can rise more. The German Yields have risen back sharply. The chances of the dip to test their support have reduced. A further rise from here will indicate the resumption of the uptrend and take them higher. The 10Yr GoI is holding above its support. We expect the yield to break this support and fall. A narrow range is possible for some time before the expected fall in case the yield bounces from here.

Global equities remain mixed. Dow is gradually weakening and can decline towards 53000 while the broader 53000-55000 range remains intact. DAX needs to sustain above 26500 to extend its rise towards 27000-27500. Nifty remains cautiously positive above 24300 and can recover towards 24500 or higher, while a break below 24300 would weaken the outlook. Nikkei remains bullish despite a slight correction and can rise towards 70000 and beyond. Shanghai faces resistance near 3950, with a break below this level keeping the downside towards 3875-3850 intact.

Crude prices likely to remain range-bound between $80-$95 for Brent and $75-$90 for WTI. Gold remains bullish above $4200 and can rise towards $4600 and higher on a break above $4500. Silver has bounced back and can advance towards $70-$75. Copper has recovered from $6.50 and can rise towards $6.80, with a sustained break above it opening the way towards $7.00. Natural Gas remains weak but could find support near $2.60 and bounce towards $2.75-$2.80.

Visit KSHITIJ official site to download the full analysis

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.

GBP/USD trades near three-month top as fading Fed hike bets undermine USD

The GBP/USD pair attracts some dip-buyers at the start of a new week, and climbs above mid-1.3500s during the Asian session, closer to over a three-month high touched on Friday. Moreover, the prevalent US Dollar selling bias favors bullish traders and suggests that the path of least resistance for spot prices remains to the upside.

EUR/USD strengthens above 1.1550 as Fed rate hike bets fade

The EUR/USD pair gathers strength to around 1.1575 during the early Asian trading hours. The US Dollar edges lower against the Euro amid weaker-than-expected US economic data and shifting central bank expectations. Traders will take more cues from the speech of the European Central Bank President Christine Lagarde on Wednesday.

Gold remains close to June 5 high as receding Fed hike bets undermine USD

Gold builds on Friday's bounce from the $4,300 neighborhood, or a one-week low, and gains some follow-through positive traction at the start of a new week. The commodity, however, struggles to capitalize on the momentum beyond the $4,400 mark and remains below its highest level since June 5, touched on Friday, amid mixed fundamental cues.

Cardano: Whale selling, weak momentum put ADA at risk

Cardano (ADA) nears key support zone, trading at $0.177 after correcting over 10% the previous week. The price decline is supported by whale wallet offloading ADA tokens. Meanwhile, weakening momentum indicators and bearish derivatives metrics suggest a cautious tone among traders and hint at further losses if ADA slips below key support.

US Dollar Weekly Forecast: Economic cracks challenge Fed rate bets

It was a strange week for the US Dollar: while the geopolitical situation has remained largely unchanged, with the usual back-and-forth between the US, Iran, and occasional third parties, disappointing domestic data have re-emerged, reducing expectations of potential tightening by the Federal Reserve in the next few months.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.