Morning briefing: The Euro is stuck between the 1.1800-1.1600 region
The Dollar Index faces immediate resistance at 98, break past which will be needed to rise further. An immediate trade range of 97-99 can hold for some time. The Euro is stuck between the 1.18-1.16 region. EURINR below 103.50 can be vulnerable to fall back towards 102.50-102.00. EURJPY and USDJPY can hold the 171-173 and 146.00-148 range for some time. USDCNY has bounced well and if sustained can head towards 7.15-7.17 in the near term. Aussie and Pound needs to decisively breach the resistance at 0.655 and 1.3530 respectively to rise further. USDINR turned lower from 88.33 itself and while below 88.50, a test to 88.00-87.75 looks likely in the near term. US ISM Manufacturing data release is scheduled today.
The US Treasury yields have inched up further. They are managing sustain above their support. That reduces the danger of seeing more fall. It also keeps the chances alive of the yields rising in the coming days. The German yields have moved up further. The bullish bias is intact to see more rise. The 10Yr GoI continues to oscillate inside the expected range. The sideways range can continue for some time. Bias is negative to see a downside break of this range eventually.
The Dow Jones is likely to dip within the range of 46000-44500 while the Dax can trade within 23500-24500 region in the near term. Nifty has bounced well from support near 24400 and can now move up towards 24800-25000 in the coming days. Nikkei has bounced well and while above support at 42000-41000, view is bullish for a rise to 43000. Shanghai can rise towards resistance near 4000 before declining towards 3800 in the medium term.
Brent and WTI are both testing their immediate resistance levels, and a break higher could extend the uptrend towards $70–$72 (Brent) and $66–$68 (WTI), while failure to break through may see them slip back towards $67–$65 and $62–$60 respectively. Gold has surged past $3,550 to a record high with scope to test $3,600–$3,650. Silver remains bullish above $41 with room for $42.50–$43.00. Copper looks poised to extend its rise towards $4.65–$4.70, and Natural Gas, despite a brief dip, stays on track for $3.10–$3.20.
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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.
