Morning briefing: The Dollar Index can decline further within its 99-97/96 range
The Dollar Index can decline further within its 99-97/96 range. While Euro & EURINR have scope to head towards 1.18/19 and 105 or higher in the near term. EURJPY on a break past 175 can head towards 176 and above in the coming sessions. USDJPY started coming off from 150 itself and if the fall extends further, a test to 148 or lower levels look likely to happen. USDCNY can trade within 7.14/15-7.10 region for some time. Aussie and Pound have recovered well and a breach past 0.66 and 1.35 can open the doors for higher levels in the near term. USDINR can head towards 89.00-89.10, while above 88.50/25.
The US Treasury yields have dipped slightly. The near-term picture is positive. Support is there to limit the downside. While the supports hold, the yields have potential to break their immediate resistance and rise going forward. The German yields have come down slightly. But support can limit the downside and take the yields higher eventually. The 10Yr GoI is moving up within the narrow range. A break above the range resistance can take it further higher and will bring in the wider trading range into the picture.
The Dow is headed towards resistance at 46500 while the Dax can rise to 23850-24000 while above 23600/650.The Nifty can hold above support at 24600 and bounce back towards 24800-25000 soon. Nikkei could fall futher towards 45500 or lower if the dip sustains in the coming sessions below resistance at 46000. Shanghai may continue to fall towards the lower end of the range of 3850-3750.
Brent and WTI have turned lower after testing highs, with Brent vulnerable to $69-68 while WTI is likely to stay within the $66-62 range. Gold is steady near $3,800 but needs a break above $3,850 to head towards $3,900-4,000, else it may dip to $3,700. Silver looks bullish towards $47.50-48.00. Copper has bounced back from its support and can rise towards $4.85-4.90. Natural Gas remains weak and can fall towards $3.10-3.00.
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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.
