Morning briefing: Euro is trading within its range of 1.0950-1.0800
The Dollar Index has risen past 104 again but can have upside limited to 105.0-105.50. The lower targets of 103-102 are kept open in Dollar Index until further clarity. The Euro is trading lower within its range of 1.095-1.080. A strong break below 1.08 will be needed to confirm that it has peaked out at 1.095. EURINR has immediate support near 92.50, above which it can rise back higher. USDJPY, USDCNY, AUDUSD & Pound can trade within respective ranges of 148-150, 7.22-7.26, 0.64-0.62 and 1.30-1.29 in the near term. EURJPY is rising as anticipated and above 160, can attempt to rise back towards 164. USDINR slipped below 86 and if the fall continues, can get extended to the low 85.70 before eventually rising back.
The US Treasury yields have risen slightly. The yields are stuck in a range for a few weeks now. The bias is negative to see a downside break of this range and fall going forward. The German yields remain lower but stable. There is limited room on the downside. The broader view remains bearish, and the yields are likely to resume the uptrend after some more fall from here. The 10Yr GoI is coming close to our target. We may have to look for a rise after testing the support.
The Dow Jones remains higher and traded near 42000. The outlook remains bearish at 40000-39000. In case a rise past 42200 would lead to an extended rise to 43000. DAX is falling towards 22200. Nifty has resistance overhead near 23500-23700. Rise past would confirm the end of corrections. Nikkei remains stable and flatish below 38000, and while below 38000, it looks bearish towards 37000. Shanghai tested the support of 3350 by falling to 3355 and has risen from there. While above the support of 3350, a rise towards 3400-3450 can be expected.
Brent and WTI remain range-bound, awaiting a breakout. Gold is gradually declining towards $3,000-$2,950 unless it breaks above $3,050. Silver may drop to $33.00-$32.50 before rebounding. Copper needs to sustain above $5.12 to stay bullish; otherwise, it risks falling to $5.00-$4.90. Natural gas remains weak below $4.00, with further downside possible 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.
