Morning briefing: The Euro will be needed to negate the rise to 1.1900

Vikram Murarka Kshitij Consultancy Services

The Dollar Index has recovered a bit but overall the range of 96-99 remains intact for now. The Euro and EURINR are coming off but a confirmed break below 1.17 and 100.50 will be needed to negate the rise to 1.19 and 102 respectively. EURJPY has risen past 173 and if sustained, can head towards 175-176. USDJPY bounced well from the support near 146 and has a scope to extend the rise to 149 in the near term. USDCNY has moved up from the low of 7.1491 and while it sustains, a test to 7.18 can happen in the near term. Broadly, a range of 7.14-7.18/20 can hold for a while. The Aussie and Pound can trade within 0.6650-0.6450 and 1.36-1.34 range respectively for some time. USDINR has crucial resistance at 86.50/60, below which we retain our view of seeing a fall towards 86 in the coming sessions. US Durable goods data release is scheduled today.

The US Treasury yields remain higher and stable. While they sustain above their immediate support, a further rise is possible in the coming days. The Germany yields have risen further. That continues to keep intact our bullish view. More rise is on the cards. The ECB kept the rates unchanged yesterday. The 10Yr GoI is moving up within the narrow range as expected. The range remains intact for now.

The Dow Jones declined from 44912 yesterday, but could limit its fall to 44500 and rise back towards 45000 in the coming day,s while Dax has moved up and can test resistance at 25000 before facing a rejection from there in the coming week. Nifty traded in the negative yesterday, but while below resistance at 25250, we may look for a range of 25250-24800 to hold for the very near term. Nikkei and Shanghai are likely to hold above 41000 and 3600 to rise towards 42000 and 3650-3700 eventually.

Crude prices have risen slightly and need to sustain above near-term support levels at $64 (WTI) and $68 (Brent) to slowly move up in the coming weeks. Gold has been narrowing within a possible triangle chart pattern, within which a fall to $3350 could be followed by a sharp rally in the medium term, suggesting a breakout above $3450 in the coming week. Silver is bullish towards $40/41 while above $38/38.50. Copper is headed towards resistance at $6, from where a decline looks possible in the coming days. Natural Gas has risen well but while below resistance near $3.30/20, bearishness could remain intact.

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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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