Morning briefing: The Euro could trade within 1.1325/1.1450

Vikram Murarka Kshitij Consultancy Services

Dollar Index is expected to remain strong above 100.75, keeping the momentum bullish for USDJPY towards 163/164 and leading to possible weakness in other major currencies in the medium term. However, an immediate dip in the Dollar Index towards the mentioned support could give some relief to other currencies. Euro could trade within 1.1325/1.1450 while EURINR can move up to 109. EURJPY looks structurally bearish towards 184 while below 186. USDJPY could test 161.75 before resuming its uptrend towards 164. USDCNY could test 6.7830/7800 before bouncing back to 6.80. Aussie has been stable within 0.6866-0.6931 region which can hold for the rest of the week while Pound ha before facing rejection. USDINR rose sharply yesterday, breaking above 95.10 as cautioned. If the rising momentum persists, we may expect a rally towards 95.50/96 before a decent reversal is seen.

The US Treasury Yields have moved up further. That reduced the chances of the fall expected earlier and keeps the door open to see more rise from here. The US unemployment data release today will need a close watch. The German yields are attempting to bounce back. A strong follow-through rise is needed from here to avoid falling back and go higher. The 10Yr GoI is hovering around its support. The recent price action indicates that a rise is possible in the coming days.

Global equities are largely range-bound. Dow could remain within the 52000-53000 range while resistance near 53000 holds. DAX has turned positive and can rise towards 25400-25500 if it sustains above 25200. Nifty faces immediate resistance near 24000 and can decline towards 23800-23600 while below it. Nikkei may continue to trade within the broad 68000-73000 range. Shanghai is also likely to remain range-bound between 4000 and 4150.

Crude prices remain under pressure, with Brent and WTI likely to decline towards $70 and $65 before a corrective bounce back is seen. Gold is hovering near the crucial $4000 level. A sustained break below this could trigger a decline towards $3800-$3700. Silver continues to recover gradually and can rise towards $65-$70 while support near $55 holds. Copper remains constructive above $5.90 and can rise towards $6.25-$6.30. Natural Gas continues to trade 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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