Morning briefing: The Euro is heading to 1.1500

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has slipped below 99 and can get dragged to 98-96 if it fails to see an immediate rise past 99. The Euro is heading to 1.15. Thereafter whether it extends the rise further or no will have to be seen. The EURINR is rising and if sustained, can head to the crucial resistance near 99 region. EURJPY is holding the range of 160-164 for now. USDJPY is nearing our downside target of 140. AUDUSD is trading near the crucial level of 0.64, break past which if seen can take it higher to 0.66-0.67 in the coming sessions. The USDCNY is nearing the support near 7.29 and while above it, targets of 7.32-7.35 are kept open. Pound has again risen past 1.33 and if sustained can test 1.35. USDINR continues to look bearish to 85.00-84.95 in the near term.

The US Treasury yields are managing to hold above their support. A strong rise above the immediate resistance is needed to move up further and avoid the danger of falling back again. We will have to wait and watch. The German yields have dipped further. The bearish view is intact. The yields can fall more from here. The 10Yr GoI continues to move down in line with our expectation. Outlook is bearish.

Most equities look weak except the Nifty and Shanghai which continue to move up and maintain a slow upward momentum. Dow and Dax look weak towards 38000 and 20000-19600 while Nikkei can test 34000 before rising towards 35000 eventually. Nifty needs a strong break above 24000 to continue its upmove while Shanghai could be on a slow rise towards 3300-3350.

Gold drifts higher today to see a fresh high of 3395 while global trade tariff uncertainties remain intact, and investors turn to the yellow metal as safe haven. A further rise towards $3450/3460 looks likely in the near term. Silver is also moving up slowly and while above support at $32, it can move up further towards $34/35. Brent and WTI have dipped today and could trade within $68-64/62 and $66-62/60 for sometime before attempting to rise further in the medium term. Copper can head towards $4.9-5 soon while Natural Gas looks bearish towards support at 3.

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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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