Morning briefing: Gold continues its bullish momentum towards $3,400 –$3,450
The Dollar Index fell to 99.21 after a federal court reinstated most tariffs. For now, while below 101-100, a fall to 98-96 looks likely to happen. The Euro has risen past 1.13 again and if sustained can head towards 1.15-1.16 levels. EURINR needs to break past 97 to head towards 98-99 levels. Till then, the range of 96-97 can persist. EURJPY continues to trade within the 165-160 region. USDJPY has been coming off and can fall towards 142 or even 140 before halting. AUDUSD is declining within the 0.650-0.635 range and the Pound is headed towards 1.36 again. The USDCNY below 7.21, can get dragged towards 7.175-7.150. The USDINR can dip within its 85.75-84.75 range. US Personal Income and US PCE data releases are scheduled today.
The US Treasury Yields have come down sharply. There is a support near current levels which if broken can drag the yields further lower in the coming days. The US PCE data release today will be important to watch. A lower PCE number can drag the yields below their support. The German Yields have declined sharply contrary to our expectation. They have to hold above their immediate support to keep alive our bullish view. The price action in the next few days is going to be important. The 10Yr GoI remains lower and stable. The view remains bearish to see more fall from here.
The Dow has risen and brings back our earlier target of 42500-43000 into the picture. Dax broke below 24000 to test 23917, and while it sustains lower, it can fall to 23500-23000. Nifty can rise to 25000-25100 while above 24500/800. Nikkei declined from 38454, and while the fall continues, a test of 37000 is possible. A broad trade range of 38500-37000 can hold for the near term. Shanghai has dipped to the lower end of the 3340-3400 range, and if it breaks lower, it would open up vulnerability for a fall towards 3300.
Crude prices tested higher levels but pulled back amid OPEC+ production concerns and could remain range bound for some time. Gold continues its bullish momentum towards $3,400–$3,450. Silver holds above $33 but needs a break above $34 to advance further. Copper is showing strength and may target $4.80–$5.00 unless support breaks. Natural gas has recovered from a dip and could move higher if it sustains above $3.50.
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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.
