Morning briefing: The Dollar Index while trades below 100.00-101.00

Vikram Murarka Kshitij Consultancy Services

The Dollar Index while trades below 100-101, can be vulnerable to fall towards 98-96. The Euro and EURINR, while trades above 1.13 and 97 respectively, can ascend towards 1.15-1.16 and 98-99 levels. EURJPY continues to trade within the 160-165 region. USDJPY has risen a bit but faces immediate resistance at 144.50-145.00 below which a fall back towards 142 or even 140 can happen before halting. AUDUSD and Pound are trading within the range of 0.6400/635-0.6550 and 1.34-1.36 respectively. The USDCNY has declined as anticipated and a further fall below current levels can drag it further to 7.17/15. The USDINR can continue to hold the range of 85.25-85.75 for a while. IN Services PMI and US ADP Employment data releases scheduled today.

The US Treasury Yields remain stable. They have to break their immediate resistance to avoid further fall and rise. It is a wait and watch situation now. The German yields can dip to test their support from here. The price action thereafter will need a watch to see if a bounce is happening or not. The 10Yr GoI remains stuck in a narrow range and can fall within it. The bias is negative to break the range on the downside and fall more.

All the mentioned equity indices have risen well except the Nifty, but could face near term resistances ahead. The Dow and the Dax are headed towards resistances of 42500/43000 and 24500 respectively from where a correction can be possible while Nikkei and Shanghai are headed towards resistances of 38000/38500 and 3400 respectively. Unless ye above mentioned resistances break, it will be difficult for the indices to maintain the bullish momentum for the medium term. Nifty has fallen sharply but could.bounve back to 24800 while above support at 24400. Else, failure to hold above 24400 can bring in fresh bearishness towards 24200/24000. Watch price action at 24400.

Crude prices are trading below resistance levels, indicating potential declines towards $62-60 (Brent) and $60-58 (WTI) in the near term. Gold remains strong targeting $3,450–$3,500 and Silver eyeing $35.50–$36.00. Copper has rebounded above $4.80, and looks bullish towards $5.00–$5.10. Natural gas is stable above $3.70, with scope for a rise towards $4.10.

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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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