Morning briefing: The Euro can rise towards 1.1500-1.1600
U.S. President Donald Trump once again ratcheted up his trade war by stating that the European Union be hit with 50% tariffs but extended the deadline to July 9 from June 1. The Dollar Index can fall towards 98-96, while the Euro can rise towards 1.15-1.16. EURINR has interim resistance at 97.50, need to see whether it holds or continues the rise further. EURJPYcan broadly remain within the 165-160 region. USDJPY can extend the fall to 142-140 in the coming sessions. AUDUSD and Pound on a break past 0.655 and 1.36 can extend the ongoing rise further. Failure to do so can initiate a corrective fall in the near term. The USDCNY can test the support near 7.15-7.125 before halting. The USDINR on the offshore is trading lower. The pair in the near term can extend the fall to 84.90/75 before turning higher towards 86.
The US Treasury Yields remain lower. The immediate outlook is mixed. The yields can go either way from here. We will have to wait and watch the movement over the next few days to get clarity. The German Yields have risen. The view remains bullish. The yields have room to rise more. The 10Yr GoI remains lower and is oscillating in a narrow range. The view is bearish. We expect the yield to fall in the coming days.
The Dow fell sharply on Friday after Trump’s warning of a 25% tariff to Apple for iPhones sold in the US not made in the US and recommendation of a 50% tariff to the EU starting 1st June. But the Dow could rise today on delay of the recommended tariff to EU to 9th July 2025. Dow can rise towards 42500 while above support at 41000. Dax, Nifty, Nikkei and Shanghai can rise in the near term towards 24000, 25000-25200, 38000/39000 and 3400 respectively while above their near term supports at 23000, 24000, 37000 and 3340.
Crude prices are rebounding from recent lows, with Brent likely to stay between $67–$63 and WTI between $64–$60 unless a breakout occurs. Gold is trending higher, aiming for $3,400–$3,450, while Silver needs to break above $34 to target $35–$36, otherwise it may consolidate. Copper remains bullish following a surge to $4.89, supported by global supply concerns and tariff tensions, with potential for $5.0–$5.1. Natural gas is moving up as expected, targeting $3.8–$4.0 soon.
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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.
