Morning briefing: Euro remain vulnerable to fall towards 1.1500-1.1400

Vikram Murarka Kshitij Consultancy Services

The Dollar Index can head toward 100-101 if the rise sustains above 99.50-99.0. While Euro remain vulnerable to fall towards 1.15-1.14 while it trades below 1.1650. EURINR continues to trade within 103-102 region. EURJPY & USDJPY have immediate support below current levels. Need to see whether the support hold and rebound occurs or the fall gets extended further. USDCNY looks bearish towards 7.075 while it trades below 7.125. The Aussie can test the support near 0.6520 or even 0.645 if the fall extends further. The Pound needs to bounce from the support near 1.3140. Else, a breach below 1.3140 can drag it towards 1.28 in the medium term. USDINR can extend the rise towards 89.00-89.30 on a break past 88.80 before eventually coming down.

The US Treasury yields remain higher. The yields have to breach their immediate resistance to rise further from here itself. Else one more leg of fall will still be possible before a reversal happens. The German yields remain higher and stable. They have room to rise to test their resistance and then reverse lower again. The 10Yr GoI has come down sharply. Failure to rise back immediately can take it further lower.

The Dow and DAX have closed on a positive note last week but both indices will have to remain above 47500 and 23900 respectively to hold the upmove intact from here else can have scope to decline to 47000-46500 and 23800 respectively. Nikkei has surged well above 52000 and could be headed towards 53000-54000 soon. Nifty has dipped below the crucial support at 25800. Unless an immediate bounce is seen, Nifty can continue its fall to 25600/25400 soon. Shanghai needs to hold above 3900 to trade within 3900-4000. A brek below 3900, if seen can take it lower towards 3850-3800.

Crude prices have rebounded slightly, supported by geopolitical tensions, but remain weak below $66 (Brent) and $62 (WTI) with risks of further decline. Gold and Silver extended their corrections, staying bearish below $4100 and $50 respectively. Copper remains range-bound between $5.20-$5.00. Natural Gas continues to strengthen, targeting $4.20 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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