Morning briefing: The Dollar Index has limited upside to 101.00

Vikram Murarka Kshitij Consultancy Services

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 in line with our expectation. They can fall further to test their support. The price action thereafter will need a watch to see if a reversal is happening or not. The German yields have bounced but are unlikely to sustain. The view remains bearish, and the yields can reverse lower again. The 10Yr GoI has bounced well. If this sustains, a further rise is possible. The crucial support is holding well for now. But a strong follow-through rise above the immediate resistance is needed to negate the danger of falling back.

Dow Jones is hovering around 40,000 with potential to rise towards 40,700–41,000, while DAX continues to move higher towards 22,300–22,600, where price action needs close monitoring. Nifty fell sharply but is holding above 23,850; a further dip to 23,500 is possible before resuming its bullish trend towards 24,500–25,000. Nikkei is progressing towards 36,000–36,500 as expected, after which a medium-term correction could occur. Shanghai remains bullish above 3,250, with targets of 3,350–3,400 in the coming weeks.

Brent and WTI are trading within their expected ranges and may continue to do so until a breakout occurs. Gold is holding above its key support at $3,300, with potential to rise towards $3,400–$3,500. Silver failed to sustain above $33.5 and may fall further towards $32.0. Copper remains weak below $4.90, with chances of declining towards $4.60–$4.40. Natural Gas is holding above $3.0 and could rise towards $3.2–$3.4 in the near term.

Visit KSHITIJ official site to download the full analysis

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.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.