Morning briefing: The Euro has risen past 1.1500

Vikram Murarka Kshitij Consultancy Services

Donald Trump slammed Fed Chair Jerome Powell and urged him to cut interest rates now to avoid an economic slowdown. As a result,the Dollar Index tested the low of 97.92 yesterday. The fall can extend to 97-96 before attempting to rise back. The Euro has risen past 1.15 and has a scope to extend it further to 1.16-1.18. The anticipated rise can get delayed only if a corrective fall is witnessed initially. The EURINR has the crucial resistance near 99 region. EURJPY is holding the range of 160-164 for now. USDJPY can soon test our target of 140. AUDUSD has risen past 0.64 and if sustained, can immediately target 0.655 on the upside. The USDCNY above 7.29 can attempt to rise back again towards 7.32-7.35. Pound can soon test 1.35 on the upside before getting peaked out. USDINR can limit the downside to 85.00-84.85 and start rising. Only a break below 84.85 if seen, can drag it further to 84.50.

The US Treasury yields have risen sharply and have potential to move up further to test their resistance. The price action around the resistance will need a watch to see if the rise is extending or the yields are reversing lower again. The German Yields remain lower and stable. View remains bearish. The yields have room to fall more from here. The 10Yr GoI has come down sharply and is close to a crucial support. Failure to bounce back from the support will increase the danger of a much deeper fall.

Dow plunged after Trump criticized FED chair Jerome Powell and raised concerns over the FED’s independence and confidence in the US Economy stating that the economy could slow down unless interest rates are lowered immediately. Dow can test 36000 if it fails to sustain above 38000. Dax could be vulnerable to see 2000-19600 if it fails to sustain above 21300. Nifty has shown a good rally over the past few days but global sentiments could lead to a lower opening today. But if it sustains above 24000, it can slowly pick up momentum to rise towards 24500/25000 soon. Nikkei can rise to 35000 while above 34000. Shanghai has risen as expected and can see a slow upmove to 3350-3400.

Crude prices may trade within a broad range below immediate resistance levels. Gold continues its upward momentum toward $3500–3550 with no major hurdles. Silver remains bullish above $32, targeting $34–35. Copper is rising steadily and could reach $4.9–5.0 if it holds above $4.7. Natural gas is supported at $3.0, with potential to rise to $3.2–3.4 unless it breaks below, which could lead to a fall towards $2.8–2.6.

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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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