Morning briefing: Can EUR/USD witness a fall back to 1.1200-1.1100?

Vikram Murarka Kshitij Consultancy Services

The Dollar Index on a rise past 100 can head to 101-101.50. The Euro and EURINR tested 1.1474 and 98.77 as expected and now can witness a fall back to 1.12-1.11 and 96.0-95.5 respectively. EURJPY is stuck within 160-164 range. USDJPY needs to rise past 144 to negate the fall to140 in the near term. AUDUSD is trading near the crucial level of 0.635-0.640. The USDCNY above 7.28, can attempt to rise back towards 7.32 and higher. Pound can test 1.32 soon. Thereafter, whether the rise extends further, or the pair falls back will have to be seen. USDINR was closed yesterday. For now, view remains intact for it to see a fall to 85.50 in the near term. Watch out for the IN CPI and IN Trade Balance data releases scheduled today.

The US Treasury yields are coming down. They have support coming up which has to hold to keep alive the chances of rising back. A break below the upcoming support can drag them lower. We will have to wait and watch. The German Yields have come down further. The view is now bearish. More fall can be seen in the coming days. The 10Yr GoI is hovering above its support. We expect the yield to sustain above this support and rise back in the coming days.

The Dow Jones may face resistance near 41500 which can take it down towards 39000-38000. We would remain cautious between 40000-41500 region. DAX needs to break above 21300 to rise further towards 22000/22300 and to negate the downside towards 19600. Nifty has support near 22400 but a decisive rise above 23000/23500 is needed to ensure further upmove. Nikkei could be headed towards 36000 while above 33000. Shanghai could spend some time within the 3200-3300 region before attempting to move up further.

Crude prices remains bearish and could decline further in the coming weeks. Gold is rising and may test resistance near $3,300; a breakout could push it higher, while a reversal may lead to a dip. Silver needs to hold above $32 to continue upward, otherwise, it may fall. Copper is near resistance and could rise further if it breaks above, else a pullback is likely. Natural gas has declined unexpectedly and may drop to $3.00 before rebounding.

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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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