Morning briefing: Euro's bullish outlook continues

Vikram Murarka Kshitij Consultancy Services

The Dollar Index continues to remain stable within the 98.35-99.50 region. A better clarity could be expected after the US CPI data release scheduled today. The targets of 98-96 are kept open for now. We retain our bullish view on the Euro and EURINR towards 1.15–1.16 and 99–100 while both pairs trade above 1.1400-1.1350 and 97-96 respectively. EURJPY must sustain above 165 to extend the move towards 166–167 in the coming sessions. USDJPY faces strong resistance in the 146–147 region. While it holds, a corrective fall towards 142-140 can be witnessed. AUDUSD and Pound continue to hold their respective ranges of 0.6500-0.6400/635 and 1.36-1.34 in the near term. The USDCNY below 7.20 can extend the fall towards 7.17/15 in the near term. The USDINR needs to either break past 85.75/86 or fall below 85.50 to get further directional clarity.

The US Treasury Yields have dipped further. They look vulnerable to fall more. A strong rise and a break above the immediate resistance is needed to move higher. We will have to wait and watch the CPI data release today which can determine the move in yields. A strong CPI number is needed to take the yields higher. The German yields are coming down. They can fall more in the coming days. The 10Yr GoI is moving up in line with our expectation. It can rise further from here.

The Dow is headed towards 43000 while the Dax can decline to 23500-23000 below crucial resistance near 24500. Nifty could be ranged between 25200 and 24800 uless a sharp break on the upside is seen. Nikkei and Shangahi look bullish towards 38500 and 3450-3500 respectively.

Crude prices have faced resistance and pulled back. They may decline further unless key resistance levels are breached. Gold remains range-bound between $3,300–$3,400, while Silver holds a bullish outlook towards $38–$40. Copper continues to rise, targeting $5.00, whereas Natural gas dipped below $3.60 and may fall to $3.50 before rebounding.

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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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