Morning briefing: The Euro has immediate resistance at 1.1600
Dollar Index has a scope to rise back towards 100-101 while it trades above 98/97. The Euro and EURINR have immediate resistance at 1.16 and 102 respectively. While it holds, both can trade within 1.18-1.14 and 102-100/99 regions respectively. EURJPY if slips below 170, can get dragged towards the deeper support at 168. USDJPY above 146 can target 149-150 in the near term. USDCNY is holding its 7.14-7.20 range for now. The Aussie and Pound have upside capped at 0.65/66 and 1.34 max. Eventually both the pairs are likely to turn lower in the medium term. USDINR had remained volatile since yesterday. On the NDF it is currently trading higher. Watch price action closely around current levels to see whether the resistance at 87.75-88.00 holds and pushes the pair lower or the rise extends further. IN Services PMI and the US Trade balance data releases are scheduled today.
The US Treasury yields declined further and are at a support. Failure to rise back immediately can see an extended fall going forward. The German yields have declined. But support is there to limit the downside and keep the broader bullish view intact. The 10Yr GoI has come down sharply and is now near the lower end of the range. If the range continues to hold well, then the yield can rise back within it.
Slight recovery is seen across most equity indices as respective near term supports hold well. Dow and Dax have risen slightly. While above 43000 and 23500-23000 respectively, the indices could continue to rise slowly towards 44500 and 24000-24500. Nifty could open on stable note and could decline further today on concerns of a higher tariff threat by Trump overnight. A fall back towards 24400 cannot be ruled out. Nikkei and Shanghai are trading higher and while above supports at 40000 and 3550, a slow rise can be seen in the coming sessions towards 41000-42000 and 3600-3650 respectively.
Brent and WTI are under pressure but may rebound if their immediate supports at $68 and $66 hold, respectively. Gold is bearish below $3450 with potential to drop to $3350, while a break above $3450 could target $3600–$3700. Silver has likely bottomed at $36.25 and may rise towards $38–$40. Copper remains bullish above $4.4, aiming for $4.6–$4.8 unless it breaks lower to $4.2. Natural Gas has fallen below $3.00 and may extend its decline towards $2.70.
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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.
