Morning briefing: Euro tested 1.1164 before bouncing back to current levels

Vikram Murarka Kshitij Consultancy Services

Currencies have moved contrary to our near term expectations, reversing the immediate trends seen yesterday. The Dollar index rose back above 102 much faster than expected while Euro tested 1.1164 before bouncing back to current levels. A sustained break below 1.12 can be strongly bearish. USDJPY has dipped back into the 156-159 zone while EURJPY can trade between 176-178. EURINR could trade between 107.50-109 region for the next couple of weeks while the USDINR has scope to rise towards 97. RBI indeed hiked rates by 25bps as expected. USDCNY has opened lower today and can dip towards 6.69 on a break below 6.70.

The US Treasury and the German Yields remain stable. The Treasury yields are looking bullish and can rise more from here. The German Yields on the other hand may dip to test their support first. Thereafter the broader upmove can resume. The 10Yr GoI has risen well yesterday. The outlook remains bullish. The yields can rise more going forward. The RBI raised the interest rate by 25 bps yesterday in line with market expectation.

Dow and DAX remain weak below 51500 and 25500, with downside towards 50500-50000 and 25000-24800. Nifty can fall towards 22250 below 22600. Nikkei has weakened below 70000 and can decline towards 69000-68000. Shanghai has opened strongly and can gradually rise towards 3900-3950.

Crude prices have eased after the EIA cut its 2026 global crude demand forecast. Brent and WTI can rise towards $105-$110 and $95-$100 while above support. Gold needs to sustain above $4100 for a rise towards $4300-$4400. Silver needs to hold $60 for a rise towards $63-$65. Copper can rise towards $6.80-$6.85, while Natural Gas can rise towards $3.30-$3.50.

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 consolidates above 0.6950 amid risk aversion

AUD/USD consolidates in the Asian session on Thursday, trading just above 0.6950 as traders assess developments in the Middle East crisis. The Pentagon reportedly ordered readiness for potential strikes against Iran. This keeps the geopolitical risk premium in play, which, along with hawkish FOMC Minutes and elevated US bond yields, will likely keep the US Dollar underpinned at the expense of the pair.

USD/JPY slips below 158.00 as USD retreats

USD/JPY returns to the red below 158.00 in the Asian session on Thursday amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, the US Dollar eases from near an 18-month high on profit taking, ignoring Wednesday's hawkish FOMC Minutes and the risk of a further escalation of tensions in the Middle East, adding to the pair's pullback.

Gold remains below $4,150 as as hawkish Fed and firm USD cap gains

Gold struggles to capitalize on a modest intraday uptick, trading below $4,150 through Thursday’s Asian session. The US Dollar retains a bullish undertone and caps the precious metal, warranting caution before positioning for an extension of the overnight bounce from a two-month low.

Ripple and Stellar test key support amid rising downside risks

Ripple (XRP) and Stellar (XLM) remain under pressure and extend their corrections on Thursday as weakening derivatives metrics and broader macroeconomic headwinds weigh on sentiment. XRP and XLM approach a key support zone after three consecutive days of losses so far this week.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.