Morning briefing: Euro may fall back to 1.1500

Vikram Murarka Kshitij Consultancy Services

The Dollar index trades higher above 99.50 after a stronger US IIP data release yesterday. While the index looks bullish above 99.50, Euro may fall back to 1.15. EURINR can test 109 before bouncing back to higher levels of 111-112 while the EURJPY could test resistance at 186. Thereafter it would be crucial to see which way the price moves. USDJPY continues its slow uptrend to 161 while USDCNY looks bearish towards 6.75 while below resistance at 6.80. Aussie and Pound can rise to 0.71-0.7150 and 1.3550 respectively from current levels. USDINR rose from 94.45 to close higher at 94.72. A sustained rise can take it back to 95+ in the near term. Watche price action today near 95, if seen.

The US Treasury Yields have risen back sharply. The support has held very well. A strong follow-through rise from here will ease the downside pressure and take them further higher. The US Fed meeting outcome tomorrow will be important to watch to see if there is any change in their interest rate path for the rest of the year. The German Yields have come down further. They have room to test their support before reversing higher again. The 10Yr GoI remains lower. Any bounce will be short-lived. There is room to fall more from here to test its support and then possibly reverse higher again.

Global equities remain supported by positive sentiment surrounding the expected US-Iran agreement. Dow continues to trade near record highs and can rise towards 52500-53000 while above 51000. DAX remains constructive above 24500 and can advance towards 25250-25500. Nifty needs to hold above 23750 to attempt another breakout above 24000. Nikkei remains bullish towards 70500-71000 while above 68000. Shanghai continues to strengthen and can rise further towards 4125-4150.

Crude prices remain under pressure as Brent and WTI continue to trade below $85. If they sustain below this level and the expected US-Iran MoU signing proceeds smoothly, a further decline towards $75-$70 becomes more likely. Gold and Silver have recovered from recent lows and can rise towards $4500-$4600 and $72-$74 respectively in the near term. Copper has seen a minor dip, but the broader outlook remains positive for a rise towards $6.70-$6.75. Natural Gas is likely to remain within the broad $3.00-$3.50 range for some time.

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.

GBP/USD holds losses below 1.3550 after weak UK jobs data

GBP/USD holds losses below 1.3550 in European trading hours on Tuesday. The UK ILO Unemployment Rate held steady at 4.9% in the three months to June, against a forecast of 4.8%, while Employment Change arrived at 83K in the same period versus 147K previous. Weak UK labor data keep the British Pound under pressure, driving the pair lower.

EUR/USD flatlines below 1.1600 amid Oil-driven inflation fears

EUR/USD holds steady below 1.1600 in the European session on Tuesday, stalling the previous day's modest pullback from a two-month high. However, a modest US Dollar uptick warrants caution before positioning for the resumption of the recent recovery from the 1.1350 area, or the July monthly swing low.

Gold sticks to losses below $4,400 as USD recovers further from two-month low

Gold remains depressed below the $4,400 mark through the first half of the European session, snapping a two-day winning streak amid a broadly firmer US Dollar. Inflation risks stemming from higher oil prices back the case for at least one interest rate hike by the US Federal Reserve in 2026.

Ripple and Stellar remain under bearish pressure as corrective declines cap upside

Ripple and Stellar remain under pressure as broader market uncertainty and weak technical momentum weigh on both altcoins. XRP is hovering below the key $1 mark on Tuesday while XLM continues its corrective decline below $0.157. Meanwhile, mixed derivatives and on-chain signals indicate cautious sentiment, leaving both cryptocurrencies vulnerable to further downside.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.