Morning briefing: Euro looks vulnerable below 1.1400, towards 1.1300

Vikram Murarka Kshitij Consultancy Services

Continued decline in crude prices has led the Dollar Index to trade higher with scope to rise towards 102 soon, while Euro looks vulnerable below 1.14, towards 1.13. This keeps the EURINR at risk of slipping towards 107.50-108.50 if it sustains below 109. USDJPY remains bullish towards 164.50-165, while EURJPY can extend to 187/188 above 186. USDCNY may edge down to 6.75 while below 6.7850. Aussie is nearing the 0.6960 support while Pound may find support near 1.3250 before bouncing towards 1.34. USDINR has met the 95.85 downside target; if the fall sustains, 95.50/25 is possible before a bounce.

The US Treasury Yields remain lower but stable. They can dip further to test their support and then rise back to resume the broader uptrend. The Fed meeting outcome tomorrow will need a close watch. The German Yields have come down. There is limited room on the downside from here. Support is there to halt the fall and trigger a reversal to keep the uptrend intact. The 10Yr GoI has come down sharply. The corrective rise seems to have ended. The yield can fall more from here.

Global equities remain mixed. Dow is likely to stay within the 52000-53000 range while above 52000. DAX needs a sustained break above 25500 to extend its rally towards 26000; otherwise, it remains vulnerable to a pullback towards 25000. Nifty has strengthened and can rise further towards 24100-24150. Nikkei remains under pressure and can decline further towards 60000 or lower. Shanghai continues to trade with a weak bias and can pull back towards 3750-3700 while below 3900.

Commodities remain mixed, with crude prices weakening on hopes of easing geopolitical tensions. Brent and WTI can decline further towards $80 and $75 respectively. Gold is likely to remain range-bound between $4000 and $4200. Silver can continue to trade within the broad $55-$65 range while support at $55 holds. Copper remains constructive above $6.30 and can rise towards $6.50. Natural Gas has turned weaker after breaking below its earlier range and can decline further towards $2.70-$2.65.

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.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.