Morning briefing: Pound is stuck within 1.3200-1.3400 region
The Dollar Index has limited upside to 101. Either from current levels or upon testing 101, it can resume its fall to 98-96. The Euro and EURINR have supports coming at 1.13-1.12 and 96-95.5 region, above which the targets of 1.16-1.18 and 99 are kept open respectively. EURJPY and USDJPY are holding the ranges of 160-164 and 140-144 respectively. AUDUSD is again attempting to rise past 0.64. Watch price action closely to see whether it breaks past it or continues to trade within 0.64-0.62 region. The USDCNY above 7.29/28 can target 7.32-7.35 in the coming sessions. Pound is stuck within 1.32-1.34 region. USDINR has turned lower from 85.6675 itself and now can extend the fall to 85 as well.
The US Treasury yields are coming down as expected. The yields have room to fall more. The German yields have fallen back again as expected. Bearish view is intact. The yields can fall further. The 10Yr GoI seems to lack a strong follow through rise although it sustains above the crucial support zone. Need to watch it cautiously as a break below the immediate support can trigger a deeper fall.
Dow Jones needs a break above 40200 to rise towards 40700-41000. Immediate outlook looks mixed just now. We may expect the 37800-40800 range to hold for the near term. Dax is bullish for a rise to 22300-22600. Nifty dipped yesterday but we keep our bullish outlook intact for a rise to 24500-25000 while above 24000-23850 support zone. Nikkei continues to rise and could target 36000-36500 in the coming weeks while the rise in Shanghai looks a bit slow but could be eventually bullish towards 3350-3400 from where some correction can be expected.
Crude prices are expected to trade within their respective ranges until a breakout occurs. Gold remains bullish above $3,300 with potential to test $3,400–$3,500, while Silver could rise towards $34.50–$35.50. Copper stays bearish below $4.95–$5.00, targeting $4.80–$4.60. Natural gas holds above support, with chances of moving up to $3.20–$3.40.
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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.
