Morning briefing: Pound can trade within 1.2900-1.3000 in the near term
The Dollar Index needs to sustain above 104, to rise to the resistance near 105.00-105.25. The Euro has fallen below 1.08 and if the fall continues, can get drag towards 1.705-1.070. EURINR if fails to see immediate bounce from current levels, can be vulnerable to fall towards 92 or lower. USDJPY and EURJPY above 150 and 162 has a scope to see a rise towards 152 and 164 respectively. The USDCNY needs to see a strong break past 7.27 to rise towards 7.30, else the range of 7.22-7.26 can continue to hold. AUDUSD & Pound can trade within respective ranges of 0.62-0.64 and 1.29-1.30 in the near term. USDINR is holding well above 85.50 so far and while above it, the rise can get extended towards 86 and higher. US Durable Goods Orders data release is scheduled today.
The US Treasury yields sustain higher but are stable. The view remains bearish to see a fall back. But whether this is going to happen from here itself or after some more rise from current levels is not clear. The German yields are inching back up. Outlook is bullish to see a rise going forward. Supports can limit the downside and keep the broader uptrend intact. The 10Yr GoI has limited room on the downside from here. We can expect the yield to rise eventually going forward.
The Dow Jones looks bullish to 43300-43500. DAX is holding the range of 222000-23500. Nifty's failure to sustain above 23800 can pull the index down to 23500-23300. Nikkei lacks the strength to sustain above 38000 and is expected to exhibit a fall towards 37000. Shanghai needs a rise past 3380 to extend the rise to 3400-3450. A support near 3350 can be seen.
Brent and WTI continue to rise and may reach $74-$75 and $71-$72, respectively. Gold needs to stay above $3,000 to move higher; otherwise, it may test $2,950 before rebounding. Silver rebounded from $33.40 and could rise towards $34.50-$35.00. Copper is showing strong bullish momentum, potentially targeting $6.00-$6.50 in the medium term and $7.50-$8.50 in the long term. Natural gas remains bearish below $4.00, with a downside target of $3.80-$3.60.
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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.
