Morning briefing: Global equities remain mixed

Vikram Murarka Kshitij Consultancy Services

The Dollar Index looks ranged within the 101-100.50 region for now who may break higher to test 102 eventually. This could take the Euro to 1.1475/80 initially before falling to 1.14/1.1380. USDJPY has scope to rise to 162/163 while markets expect an intervention from the BOJ above 162.50 level. EURINR can trade within 108.50-109.50 while EURJPY may rise towards 185/186 before falling to 184/183. USDCNY may trade within the 6.76-6.8250 region for the coming weeks. Aussie and Pound could remain below 0.70 and 1.34/35 for the very near term as these hold as interim resistances. USDINR could rise towards 95.75/96 on. A break above 95.50.

The US Treasury and the German Yields are moving up in line with our expectations. Both have room to rise further to their resistance. The US yields will need a watch after they test their resistance. The German yields are expected to turn down from their resistance. The 10Yr GoI has declined below its support as expected. It can now see a deep fall from here. Any intermediate bounce will be short-lived.

Global equities remain mixed. Dow and Nifty continue to strengthen and can rise towards 54000 and 24600-24800 respectively while holding above key support levels. DAX needs a sustained break above 26000 to extend its rally towards 26500; otherwise, a pullback towards 25500-25000 is possible. Nikkei is likely to remain range-bound between 68000 and 73000. Shanghai continues to hold above 4000 and could trade within the 4000-4150 range for some time.

Crude prices remain under pressure as higher OPEC+ output and lower Saudi selling prices continue to weigh on the market. Brent can decline towards $70-$65, while WTI may test $65 before either bouncing towards $70-$75 or falling further to $60. Gold is facing resistance near $4200-$4250 and could pull back towards $4100-$4000 unless it breaks higher. Silver and Copper remain constructive and can rise towards $65-$70 and $6.30-$6.40 respectively. Natural Gas is likely to remain range-bound within the broader $3.00-$3.50 range.

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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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