Morning briefing: Euro is nearing the immediate support around 1.0450
The Trump’s statement of tariffs on Mexico and Canada would proceed as planned led Dollar Index to limit the fall to 160.12. Still a strong break past 107 will be needed to turn bullish in the near term. Euro is nearing the immediate support around 1.0450. EURINR can trade within its narrow region of 91.50-90.50. USDJPY has limited upside to 152 and target of 148 is kept open for now. EURJPY has bounce well from support around 156 and can head towards 158/60 soon. AUDUSD can extend the fall to the support around 0.63. Pound needs to sustain above 1.26 to extend the rise towards 1.28 in the near term. Else, any break below 1.26 can make it bearish again. USDCNY is holding well above support around 7.225 and can rise towards 7.28. USDINR is trading within 86.50-86.80 region, break below which will be needed to head towards 86.15. US Case Schiller and US Consumer Confidence data releases scheduled today.
The US Treasury yields have declined below their key intermediate support. While this break sustains, the yields can fall more from here. The German yields remain stable. The bullish view is intact, and the yields can rise going forward. The 10Yr GoI remains stuck inside the narrow range. The immediate outlook is unclear.
The Dow Jones failed to sustain above 43500 and closed below it. The outlook remains bearish towards 43000-42000. DAX is holding the support near 22000 and needs a follow-through rise that would take the index higher to 23000. Nifty remains above 22,\500, and as long as this support holds, a rise towards 23000 remains possible. Nikkei trades above the crucial level of 38000. Going ahead, above 38000, a bounce towards 39000-40000 is likely. Shanghai is approaching 3370-3400.
Crude prices have bounced back from their respective support levels and remain within a range of $77-$73 (Brent) and $73-$79 (WTI) for the near term. Gold and Silver may rise towards $3000 and $33.5-$34.0 respectively, in the coming weeks. Copper needs to break below $4.5 to turn bearish towards $4.4-$4.2; otherwise, it can bounce back to $4.6-$4.7. Natural Gas can rebound towards $4.2-$4.4 as long as it stays above $3.9-$3.8.
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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.
