Morning briefing: Euro is ready for a dip from current levels to fall below 1.1500

Vikram Murarka Kshitij Consultancy Services

The Dollar index continues to drag itself along the support trendline on the 3-day charts ahead of the US CPI data release today. Euro is ready for a dip from current levels to fall below 1.15. USDJPY can aim for 160-161 while above 159. EURJPY can slowly rise towards 185-160 region if it breaks above immediate resistance at 184. EURINR needs to dip from resistance near 110.30 to fall to 109-108. Aussie and Pound can test 0.71 and 1.3550 before facing rejection from there. USDCNY can target 6.70 in the near term while below 6.75. USDINR could trade below 95.50 for now. A break above this level is needed for a test of 95.75 or higher. Till then the spot can trade between 95.00-95.50.

The US Treasury Yields have come down from their highs. But supports are there to limit the downside and keep the broader uptrend intact. The US CPI data release today will need a close watch. The German Yields have dipped. We expect them to bounce back from their support and go higher eventually. The 10Yr GoI tested its resistance but failed to breach it. A sustained break above the resistance is needed to go higher and delay the expected fall.

Global equities remain mixed. Dow is likely to stay range-bound within the 53000-55000 range. DAX remains constructive and can rise towards 27000 on a sustained break above 26500 while support at 26000 holds. Nifty remains weak below 24500 and can decline towards 24350 before resuming its broader uptrend towards 24800-25000. Nikkei continues to strengthen and can rally further towards 68000-70000. Shanghai has turned weaker after facing resistance near 3970 and can decline towards 3900-3850 in the near term.

Brent and WTI likely to remain within the $80-$95 and $75-$90 ranges respectively. Gold remains strongly bullish after testing $4495 and can rise further towards $4600-$4650 on a break above $4500, while Silver has strengthened above $65 and can advance towards $70. Copper has recovered modestly but remains vulnerable to a decline towards $6.50-$6.45. Natural Gas continues to hold above the key $2.60 support and can rise further towards $2.80-$3.00 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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