Morning briefing: The Dow saw some profit taking but can rebound from 46,000

Vikram Murarka Kshitij Consultancy Services

Weakening expectations for aggressive easing of FED rate cut supported the Dollar strength. The Dollar Index can broadly trade within 97/96-99 region for some time. The Euro & EURINR can initially fall towards 1.17 & 104.00-103.50 respectively before attempting to bounce back later. EURJPY needs to breach 175 to head towards 176-178, else can fall back towards 172. USDJPY can remained ranged within 146-149 for now. Only a break past 149 can open the doors for 150-152. USDCNY needs to sustain above 7.12 to head towards 7.14/15. Aussie and Pound above 0.655 and 1.345 can attempt to bounce back towards 0.66 and 1.36 and higher levels respectively in the near term. USDINR can test 88.85-89.00 before getting peaked out. Watch out for the US Durable goods, GDP & Existing home sales data releases scheduled today.

The US Treasury yields have risen back again. The support is holding well. That keeps the door open for the yields to rise more in the coming days. The US PCE data release tomorrow will be important to watch. The German Yields continue to remain stable near their resistance. The recent price action leaves the bias bullish. The yields can breach the resistance and rise more. The 10Yr GoI retains its narrow sideways range. It is now rising back after testing the lower end of its range.

The Dow saw some profit taking but can rebound from 46000. The Dax has risen slightly and can move up while above 23650. The Nifty can rebound from 25000 else can dip further to 24800-24600. Watch price action near 250000. Nikkei has moved up well today but needs to break above 45860 to test 46000 and higher. Shanghai may continue to trade between 3850-3750 for now.

Brent and WTI broke above resistance levels and look poised to extend gains towards $70-72 and $66-68 respectively on supply concerns linked to Russia. Gold and silver have dipped with gold needing a break above $3,800 to stay bullish and Silver holding above $43 to target $45-46. Copper surged sharply after Freeport-McMoRan declared force majeure at its Grasberg mine in Indonesia following a deadly mudslide, driving prices towards $5.0 or higher, whereas Natural gas remains capped by resistance near current levels with risks of a dip to $3.0-2.9 unless it breaks above to target $3.3-3.4.

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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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