Morning briefing: Euro is stuck between 1.7050-1.0850 region

Vikram Murarka Kshitij Consultancy Services

The Dollar Index below 105 can be vulnerable to fall back towards 103. The Euro is stuck between 1.7050-1.0850 region, break above which can take it higher to 1.095. EURINR needs to sustain above 92.50 and rise past 93, else can fall back towards 92.0-91.5. USDJPY above 149 can attempt to rise back towards 151. EURJPY has risen past 162 again and if sustained, can head towards 164 soon. The USDCNY needs to see a strong break past 7.27 to rise towards 7.30, else can fall back within its range of 7.26-7.27. AUDUSD & Pound are trading lower within respective ranges of 0.64-0.62 and 1.300-1.285 in the near term. USDINR was closed yesterday. The outlook appears a bit bearish to 85.25-85.00 while it trades below 85.75. US Manufacturing ISM data release is scheduled today.

The US Treasury yields have declined sharply. That keeps intact the broader bearish view. The yields can fall further in the coming days. The German yields are rising back from near their supports. Our bullish view is intact. We expect the yields to rise going forward. The 10Yr GoI has dipped below a key support which we expected to hold. It may see an extended fall than anticipated earlier and then possibly rise back.

The Dow Jones has risen to 42000; it needs a rise past 42200 to negate the fall to 40000-39000. DAX is having a support near 22000; it needs to hold to avoid a fall to 21500-21300. Nifty can fall towards 23300-23200. Nikkei has interim support near 35300 and deeper level support at 34000-33000, which can be tested. Shanghai: only a rise past 3380 would bring the rise to 3400-3450 into the picture.

Brent and WTI have surged following Trump's tariff threats on Russian oil, and looks bullish in the near term. Gold is trading above $3,150 and may rise to $3,200-$3,250 before a possible decline. Silver faces resistance at $35.50 but could rebound if support at $34.50 holds. Copper can bounce back while it stays above $5.00. Natural gas has risen above $4.00 and is expected to rise further towards $4.20-$4.40 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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