Morning briefing: GBP/USD limited the fall to 1.3382
The Dollar Index is holding well below the resistance near 99. A test to 98 can happen soon. Euro and EURINR are headed towards the resistance near 1.16 and 100.00-100.50 region respectively. Upon testing whether the rise extends further or a corrective fall back is witnessed in both the pairs will have to be seen. EURJPY has risen sharply past 167 again and if sustained, can target 168-170 in the coming sessions. USDJPY and USDCNY can continue to trade between 146-144/42 and 7.20-7.17 region respectively in the near term. The Aussie tested the support near 0.645, while Pound limited the fall to 1.3382 itself. Both the pairs are likely to remain ranged within 0.6450-0.6550 and 1.33-1.36 regions respectively, before a break happens on either side. USDINR gave a break past 86.60 level and can now head towards 87.00-87.20 in the near term.
The US markets were closed yesterday for a public holiday. The yields are now oscillating in a range. The bias is bearish to see a downside break of the range and fall eventually. The German Yields have bounced but may not sustain. The view remains negative and the yields can fall. The 10Yr GoI has risen sharply, but well within the range. The bias is bullish to break the range on the upside and rise going forward.
Equities are looking subdued at the moment with uncertainty looming around the Iran-Israel war and comments from Trump to evacuate Tehran immediately. Dow was closed yesterday but could hold on to a broad range of 41000-43000, while Dax has declined sharply and could test 22500 before seeing a rebound. Nifty could remain ranged within 24400-25200 for some time, while Nikkei can test 38000 or lower while below 39000. Shanghai can trade within 3350-3400 with some slight chances of a break below 3350 in the near term.
Crude prices continue to rise, with Brent eyeing a break above the key $80 resistance that could trigger a rally towards $85–$90, driven by Middle East tensions. Gold has unexpectedly dropped below $3,400 and may fall further to $3,300. Silver is holding support near $36.17, with a possible rebound towards $37. Copper is likely to stay within the $4.75–$5.00 range, while Natural gas is steadily rising towards $4.20.
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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.
