Morning briefing: Euro tested 1.1089 before coming off

Kshitij Consultancy Services Team Kshitij Consultancy Services

The Monday sell-off in currency pairs continue today as well but there is some signal of mild recovery. Dollar Index, USDJPY, EURJPY and USDCNY fell sharply to the low of 102.16, 141.688, 154.41 and 7.1160 respectively before recovering from there. US Trade balance is scheduled today. Euro tested 1.10089 before coming off. Aussie is currently back within 0.64-0.66 range after falling to the low of 0.6348. Pound is above immediate support near 1.27 and can attempt to move up further. USDINR is currently trading higher (83.93/94) on the off-shore markets and even rose past 84 yesterday. Note 83.90-84 is a crucial resistance zone for the pair. It needs to be seen if RBI intervenes today to keep the pair below 84. EURINR needs to sustain above 92 to head towards 93 in the near term else can fall back to 91-90. RBA policy meeting is scheduled today.

The US Treasury yields have bounced back. While this sustains, a corrective rise is possible before the downtrend resumes. The German yields remain lower. The view is bearish and more fall can be seen going forward. The 10Yr and 5Yr GoI are coming down as expected. The downtrend is intact and there is room to fall further from here.

Dow Jones and DAX continue to fall as the recent weaker than expected US economic data have sparked the fear of recession in the US. Nikkei has recovered sharply as the support at 31000 held well and might extend the recovery further. Nifty might rise back taking cues from the recovery in the Asian markets. Shanghai remain bearish.

Crude prices have tested their respective support levels and can bounce back towards $75 (WTI) and $80 (Brent). Gold might trade within 2400-2500. Silver and Copper can test their key support on the downside and then a bounce back might be seen. Natural Gas remains lower but is likely to get support at 1.9 and might bounce back from there.

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Kshitij Consultancy Services Team

Kshitij Consultancy Services

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