Morning briefing: The Euro slipped to 1.1210
The Court of International Trade on Wednesday blocked President Donald Trump's tariffs from going into effect. As a result, The Dollar Index rose to 100.54, and the Euro slipped to 1.1210. A decisive break above 100.50 could lift the Index to 101-102. The Euro may fall to 1.11-1.10 if it breaks below 1.12. Immediate bounce towards 1.14 will be needed to negate the fall. EURINR above 96 can trade within 96-97 region. Deeper support at 95. EURJPY is trading higher within the 160-165 region. USDJPY, if sustained, can test the upper resistance at 147-148 before eventually coming down. AUDUSD is declining within the 0.650-0.635 range and the Pound is nearing the support near 1.34 region. The USDCNY failed to rise past 7.21 and while below it, can get dragged towards 7.175-7.150. The USDINR has risen as anticipated. Now whether it moves within the 85.75-84.75 region or breaks past 86 will have to be seen. US GDP data release is scheduled today.
The US Treasury Yields have bounced. A strong follow-through rise from here can take the yields higher going forward. The US PCE data release tomorrow is going to be very important. A higher PCE number will be positive for the yields. We will have to wait and see. The German yields have risen back as expected. The outlook remains bullish, and the yields can rise more. The 10Yr GoI has dipped. The bearish outlook is intact, and the yield has room to fall more.
The Dow and Dax fell contrary to our expectations of seeing a rise, after a cautious FED minutes and concerns over the US inflation and economic growth. Dow can trade within 41000-43000 while Dax can dip further to 23500-23000 on a break below 24000. Nifty continues it's fall and could test 24500-24300. Nikkei is up on sharp decline in the Japan yields and weakness in Yen and could face resistance anywhere between current levels and 39000 from where a rejection is possible. Shanghai can trade within 3340-3400 region for sometime. Only a break below 3340 would be bearish to 3300 or lower in the medium term.
Crude prices have risen on concerns over potential US sanctions on Russian exports due to the ongoing Ukraine conflict, while Gold remains bullish despite a slight dip. Silver holds steady but needs to break above $34 for further gains. Copper has seen a fall but support is holding, with a potential move to $4.8–$5.0. Natural gas has plunged but are likely to rebound unless a sustained drop below $3.5 occurs.
The Court of International Trade on Wednesday blocked President Donald Trump's tariffs from going into effect. As a result, The Dollar Index rose to 100.54, and the Euro slipped to 1.1210. A decisive break above 100.50 could lift the Index to 101-102. The Euro may fall to 1.11-1.10 if it breaks below 1.12. Immediate bounce towards 1.14 will be needed to negate the fall. EURINR above 96 can trade within 96-97 region. Deeper support at 95. EURJPY is trading higher within the 160-165 region. USDJPY, if sustained, can test the upper resistance at 147-148 before eventually coming down. AUDUSD is declining within the 0.650-0.635 range and the Pound is nearing the support near 1.34 region. The USDCNY failed to rise past 7.21 and while below it, can get dragged towards 7.175-7.150. The USDINR has risen as anticipated. Now whether it moves within the 85.75-84.75 region or breaks past 86 will have to be seen. US GDP data release is scheduled today.
The US Treasury Yields have bounced. A strong follow-through rise from here can take the yields higher going forward. The US PCE data release tomorrow is going to be very important. A higher PCE number will be positive for the yields. We will have to wait and see. The German yields have risen back as expected. The outlook remains bullish, and the yields can rise more. The 10Yr GoI has dipped. The bearish outlook is intact, and the yield has room to fall more.
The Dow and Dax fell contrary to our expectations of seeing a rise, after a cautious FED minutes and concerns over the US inflation and economic growth. Dow can trade within 41000-43000 while Dax can dip further to 23500-23000 on a break below 24000. Nifty continues it's fall and could test 24500-24300. Nikkei is up on sharp decline in the Japan yields and weakness in Yen and could face resistance anywhere between current levels and 39000 from where a rejection is possible. Shanghai can trade within 3340-3400 region for sometime. Only a break below 3340 would be bearish to 3300 or lower in the medium term.
Crude prices have risen on concerns over potential US sanctions on Russian exports due to the ongoing Ukraine conflict, while Gold remains bullish despite a slight dip. Silver holds steady but needs to break above $34 for further gains. Copper has seen a fall but support is holding, with a potential move to $4.8–$5.0. Natural gas has plunged but are likely to rebound unless a sustained drop below $3.5 occurs.
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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.
