Morning briefing: Euro has a scope to rise back towards 1.1800

Vikram Murarka Kshitij Consultancy Services

The Dollar Index is holding the range of 98-96 for now. The Euro above 1.16 has a scope to rise back towards 1.18 in the near term. EURINR continues to move within the 100-101 region. EURJPY has immediate support near 169 which can be tested if the fall extends further. Overall the target of 175 is kept open. USDJPY and USDCNY can broadly trade within the 148-145/42 and 7.18-7.14 region respectively in the near term before a break happens. The Aussie and Pound have risen a bit and can continue to trade within 0.645-0.660 and 1.35-1.38 range. USDINR on the NDF is trading at 85.6410. The pair needs to see either a break past 86.00 or a fall below 85.50 to get further directional clarity.

The US Treasury yields have come down sharply. Failure to sustain higher has brought back the earlier bearish view of seeing a fall into the picture now. So, the chance of a rise has got reduced and further fall can be seen in the coming days. The German yields remain higher and stable. View is bullish. The yields can rise more. The 10Yr GoI is moving up within the range.

The Dow Jones can remain bullish above 44200 and eventually rise to 45000 or higher. Dax on the other hand is headed towards resistance at 25000 from where a rejection can be seen. Nifty is stable over the last few sessions but while above 25400, it can rise towards 28000. Nikkei is currently trading in a narrow range of 39500-40000 and needs to break on either side to confirm further movement. Shanghai will have to sustain above 3500 to. Move up slowly towards 3550-3600 else can face an initial dip to 3475-3450.

Crude prices are rising as expected, with Brent targeting $72–$74 and WTI aiming for $70–$72. Gold remains strong above $3,300 with potential to rebound towards $3,400–$3,450, while Silver continues to trade sideways within the $37.50–$36.50 range. Copper stays bullish above $5.50, likely heading towards $5.80–$6.00. However, Natural gas has broken support and may fall further towards $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.

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