Morning briefing: The Euro is nearing the support around 1.1600

The Dollar Index has risen well and a confirmed break past 99 can open the doors for 101 in the near term. Till then,the range of 96-99 can hold. The Euro is nearing the support around 1.1600. Failure to see a bounce back can extend the fall to 1.14 as well. EURINR has fallen below 100 and while the resistance at 101 holds, a test to 99-98 looks likely to happen. EURJPY can target 175 in the near term. USDJPY and USDCNY have risen past 148 and 7.18 respectively and if sustained, can test 150 and 7.20 or even further levels in the near term. The Aussie is training lower within its 0.66-0.65 range. The Pound has slipped below 1.34 and failure to see an immediate bounce back can extend the fall to 1.32 or even lower. USDINR for now is holding the range of 86.05-85.50. Only a rise past 86.05 if seen can open the doors for 86.25-86.50 quite well. US PPI, Industrial production and the Capacity Utilisation data releases are scheduled today.

The US Treasury yields have risen sharply. As expected, the inflation data release yesterday has given the needed push for the yields. The US Headline CPI rose 2.67% (YoY) in June compared to 2.38% in May, Similarly, the Core CPI rose 2.91% (YoY) in June from 2.77% a month ago. The near-term outlook is positive for the Treasury yields and they can rise more from here. The German yields have dipped slightly. However, the bullish view remains intact, and the yields can rise back again and go up in the coming days. The 10Yr GoI has dipped and remains stuck in a narrow range within the broad sideways range.

The Dow Jones and Dax look bearish for the near term. Both are trading just above crucial levels of 44000 and 24000, which if fail to hold, can take the indices to lower targets of 43500 and 23500 soon. Nifty is holding above the support at 25000 and now needs to sustain the bounce from there to eventually move higher. An immediate trade range of 25000-25400 is possible. Nikkei may trade within 39000-40000 region for some time, with 39000 being an important support. Shanghai does not look as bullish as it looked a few days ago. It may test 3480-3450 initially before rising towards 3550 or higher in the medium term. We may look for some consolidation in the very near term.

Brent and WTI are holding above key support levels, keeping the outlook bullish for a rise towards $72–$74 and $70–$72 respectively. Gold has dipped unexpectedly but remains bullish above $3,300 with targets of $3,400–$3,450. Silver tested its support at $37.90 and could rebound towards $40–$42. Copper may rise towards $5.65–$5.70 if it sustains above $5.50, while Natural Gas continues to move higher with potential to reach $3.55–$3.60.

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