Morning briefing: EUR/USD approaches a key support

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has moved up a bit but the target of 98 is kept open as long as it trades below 100. The EURUSD is approaching the support near 1.1550 from where a rebound towards 1.165-1.1735 is expected. EURINR looks firm above 102.50 and may rise to 104.5, EURJPY & USDJPY are hovering near the resistance coming at 180 & 155 respectively. Watch price action closely to see whether the pairs hold below resistance or extends the rise further. USDCNY is back within 7.10-7.14 range. Aussie can trade within 0.6580-0.6480/60 region for some time. Pound stays vulnerable to fall towards 1.30 while below 1.3250. USDINR continues to trade within 88.50-88.85 for now.

The US Treasury yields are now at the upper end of their range. Need to wait and see if the expected bullish breakout is happening now or the yields are going to retain their range and fall back from here. The German Yields have risen, breaking above their resistance. While this break sustains, the yields can rise further and will negate our earlier bearish view. The 10Yr GoI is inching up. The support is holding well and that keeps the door open to see more rise in the coming days.

Global indices are mixed, with the Dow still open to a fall towards 46500 before attempting a rebound, while the DAX has slipped into a tighter 23500-24500 band and needs a breakout for clearer direction. Nifty has recovered well and stays biased higher as long as it holds above 25600-25500, leaving room for a push towards 26200. Nikkei is supported near 49000 and can revisit 51000-52000 if that floor holds, whereas Shanghai remains weak and is likely to hover inside the 4050-3950 range for now.

Crude prices bounced on Friday after Ukrainian strikes on Russia’s Novorossiysk port, but both Brent and WTI still look vulnerable unless they rise past their key resistance levels, keeping room for a drop towards lower supports. Gold slipped sharply and is now leaning on the $4000 support, which needs to hold to avoid a deeper slide, while Silver tested $50 and risks further weakness if that level breaks. Copper continues to drift inside its wider $5.20-4.90 band. Natural gas stays under pressure unless it pushes back above $4.7, which is essential to revive any bullish attempt.

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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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