Morning briefing: Keeping the Euro within 1.1600-1.1500

Vikram Murarka Kshitij Consultancy Services

Lower US Employment data and a dip in the US NFP on Friday led to a dip in the Dollar Index, which might trade between 100.30-99.30/99.00 for the near term, keeping the Euro within 1.16-1.15. USDJPY has recovered well and looks poised to test 159 in the next few sessions. Thereafter, it would be important to see if it continues rising towards 160 and higher or falls back towards 158/157. EURJPY can slowly rise towards 184 while above 181. Aussie and Pound can test 0.71 and 1.35 before facing rejection from there. USDCNY can target 6.70 in the near term while below 6.75. USDINR could trade within 94.90-95.50 in the early sessions of the week before showing any attempt to rise beyond 95.50.

The US Treasury and the German Yields are holding higher after their strong bounce seen on Thursday last week. Both remain bullish. They can rise more from current levels. Supports are there to limit their downside. The 10Yr GoI is stuck in a narrow range. The bias is negative to break the immediate support and fall more going forward.

Dow is recovering but can continue to trade within the 53000-55000 range with a downside bias towards 53000. DAX remains bullish above 26000 and can rise towards 27000 if it breaks above 26500. Nifty continues to hold above the key 24500 support and can advance towards 24800-25000. Nikkei has strengthened further and can extend its rally towards 68000-70000. Shanghai remains positive and can rise further towards 4000-4050 in the near term.

Crude prices remain volatile amid renewed Middle East tensions, and Brent and WTI likely to remain range-bound within $80-$100 and $75-$90 respectively. Gold remains bullish above $4200 and can rise further towards $4500-$4550, while Silver can extend its gains towards $65-$70. Copper has weakened after failing to break above $6.80 and can decline further towards $6.50-$6.45. Natural Gas has rebounded and can rise towards $2.80-$3.00 while holding above the key support near $2.60.

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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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