Morning briefing: The Euro back to 1.1300 or lower

Vikram Murarka Kshitij Consultancy Services

The Dollar index needs to hold above support near 100.90-101 to move up to 102 gradually and taking down Euro back to 1.13 or lower. EURINR is holding well above support at 107 and needs to break above 108 now to head towards 109/110. EURJPY has also risen well as expected and may soon break above 186 to rise towards 187/188 before pausing for a reversal. USDJPY trades well above 162 with scope of testing 163/164. USDCNY could trade within 6.78-6.80/81 for the near term. Aussie and Pound need to rise back above 0.69 and 1.32 respectively to avoid a decline to 0.68/67 and 1.31/30. USDINR may rise initially to test resistance at 95/95.10 before a dip to 94.25/15 can be seen again.

The US Treasury Yields have risen back sharply contrary to our expectation. A further rise from here will negate the fall that we were expecting and can take it higher. The German yields continue to oscillate around their support. They have to rise back immediately in order to avoid more fall. It is a wait and watch situation, The 10Yr GoI has bounced back well from its intraday low yesterday. Need to see if it can get a strong follow-through rise today and go further higher to get some relief.

Dow remains below 53000 and could stay within the 52000-53000 range for some time. DAX is likely to trade sideways between 24600 and 25200 until a breakout provides directional clarity. Nifty remains weak below 23900 and can decline towards 23700-23600. Nikkei retains a positive bias towards 71000-71500. Shanghai has strengthened above 4100 and can extend its rally towards 4150-4200.

Crude prices remain weak and can decline towards $70 and $65 before a corrective bounce back is seen. Gold is attempting a break below $4000. A sustained break could drag it towards $3800-$3700. Silver remains weak but support near $55 could trigger a recovery towards $65-$70. Copper continues to hold above $5.90 and can rise towards $6.25-$6.30. Natural Gas remains range-bound within the broader $3.00-$3.50 range.

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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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