Morning briefing: Pound continues to trade within 1.2850-1.3000 in the near term
The Dollar Index needs a strong break past 105 to rise further, else can be vulnerable to fall back towards 103. The Euro is stuck between 1.7050/30-1.0850 region. EURINR needs to sustain above 92.50 to rise towards 93, else any break below 92 can be bearish for the cross. USDJPY on a rise past 151 can test 152. Failure to do so can take it lower towards 149. EURJPY has risen past 162 again and if sustained, can head towards 164-165 soon. The USDCNY needs to see a strong break past 7.27 to rise towards 7.30, else the range of 7.22-7.26 can continue to hold. AUDUSD & Pound continues to trade within respective ranges of 0.62-0.64 and 1.285-1.30 in the near term. USDINR while above 85.50, can extend the rise to 86 or higher before eventually coming down. Watch out for the US Personal Income & US PCE data releases are scheduled today.
The US Treasury yields remain stable. We expect the yields to come down either from here itself or after some more rise from current levels. The broader trend is down. The US PCE data release today will be important to watch. The German yields sustain higher. Bullish view is intact. The yields have room to rise more from here. The 10Yr GoI has risen back above its crucial support after an intraday break below it. We expect the support to hold and the yield to rise in the coming days.
The Dow Jones has fallen further; with the support near 42000, the index can rise towards 43300-43500. DAX is nearing the lower end of the sideways range of 22200-23500. Nifty has risen above 23500. Only a strong rise past 23800 would negate the fall to 23300-23300. Nikkei has dropped down to 37000. Failure to hold above would take the index lower to 36000. Shanghai, while above the support of 3350, the outlook remains bullish to 3400-3450.
Brent and WTI remain bullish, targeting $75-$76 and $71-$72, respectively. Gold has bounced above $3,050 and may rise to $3,100. Silver faces resistance at $35.50; a break above could push it to $36-$38, while failure may lead to a fall towards $34-$33. Copper has dropped sharply and could decline further to $5.00. Natural Gas needs to break above $4.00 for further gains; otherwise, it remains vulnerable for a fall towards $3.60.
Visit KSHITIJ official site to download the full analysis
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.
