Morning briefing: The Euro on a break past 1.1800 can head towards 1.1900 as well
The Dollar Index continues to fall further. A test to 97.00-96.50 looks likely to happen before bouncing back later. The Euro on a break past 1.18 can head towards 1.19 as well. Else can continue to trade within the 1.18-1.16 region. EURINR needs to see a sustained rise above current levels to head towards 104 and higher. EURJPY and USDJPY can trade within the 174-172 region 149-146 region, while below 174 and 149. USDCNY is headed towards deeper support at 7.11 which can be tested soon in the near term. The Aussie faces immediate resistance at 0.66, break past which will be needed to bring 0.67 into picture. Else, a pull back towards 0.655-0.6400 is likely. The Pound has risen well and if sustained, can ascend towards 1.36-1.37 in the coming sessions. USDINR was closed yesterday.
The US Treasury and the German yields are coming down. The Treasury yields look vulnerable to fall more. The German yields on the other hand can also fall more from here. However, key supports are coming up for them. They have to rise back from there to avoid a deeper fall and negate our broader bullish view. The 10Yr GoI was closed yesterday. It can fall to test its support in the near term and then possibly bounce back again.
Most equity indices are likely to be ranged for the near term and await a breakout for further broad directional view. The Dow is headed towards resistance at 46000 while Dax has very near term resistance just above current levels and needs to break above 23800/850 to rise further towards 24000-24500. Shanghai and Nifty can head towards 3900 and 24850-25000 respectively. Nikkei continues to rise today and can head towards 44500-45000 soon.
Crude prices remain weak with Brent vulnerable to a fall towards $64–$62 while below $67 and WTI likely to decline towards $60–$58 while under $64. Gold has turned strongly bullish after breaking above $3,650 and testing a new all-time high of $3,685.70, with scope to rise further towards $3,700–$3,800. Silver is struggling below $42 and remains exposed to a dip towards $40.50–$40.00 unless it breaks higher, while Copper has bounced from $4.5255 and can rise towards $4.70–$4.80, holding immediate support near $4.40. Natural Gas stays firm after testing $3.1980 and can extend gains towards $3.20–$3.25.
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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.
