Morning briefing: Euro tests support at 1.0800

The Dollar Index broke above 105 and looks slightly bullish. The Fed minutes released on Wednesday highlighted concerns about inflation and uncertainty about when to ease rates. Members indicated a lack of confidence in moving forward with interest rate reductions, suggesting a more cautious approach to monetary policy. Euro tests support at 1.08 which needs to hold and take it back to 1.09 else could be vulnerable to test 1.0750-1.07. EURJPY and USDJPY continue to move up targeting 170 and 158 respectively. USDCNY is headed towards 7.25/26. Aussie failed to hold the support at 0.66 and can test 0.6550. The pound has fallen sharply and could test 1.2650-1.26 soon. USDINR may rise to 83.30/40/50 while above 83.15/20. EURINR can test 89.50 before bouncing back to 90+ levels.

The US Treasury yields have risen. But resistances are ahead which have to be broken to move further higher. Else a fall from here cannot be avoided. The German yields have come up to our expected levels. We have to wait and watch if a correction is happening from here or not. But, a strong follow-through rise from here can take them further higher in the coming days and will continue to keep the bullish view intact. The 10Yr and 5Yr GoI have key supports near current levels. While that holds, a sideways consolidation is possible for some time before the yields rise again.

Dow Jones has fallen sharply. A break below 39000, if seen can extend the fall to 38500. Dax is to trade between 18600 and 18900 for a while with a scope to see a break on the upside. Nifty has surged towards 23000. The level of 23000-23150 is a crucial resistance zone. If that holds, a corrective fall could be seen. Nikkei has fallen back but may find support at 38000. Shanghai has come down near the support at 3100. Need to see if that holds or if it breaks lower to 3050.

Crude remains bearish for the near term. Gold has broken below its support and looks vulnerable to a further fall from here. Silver might break below its support and target further downside. Copper has dipped below 4.8 but has support at 4.7. Need to see if that holds and produces a bounce back or not. Natural Gas has risen towards its key resistance which if holds, can lead to a corrective fall.

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