Morning briefing: The US treasury yields continue to move up sharply

Vikram Murarka Kshitij Consultancy Services

Most currencies are looking bullish against the US Dollar. Euro has moved above 1.16, Aussie and Pound could rise above 0.72 and 1.36 respectively while EURINR, Indian Rupee, Chinese Yuan can strengthen towards 111, 95.00 and 6.70 soon. USDJPY and EURJPY can rise in the near term towards 160 and 186 respectively.

The US Treasury Yields continue to move up sharply. The momentum seems to be strong. That can take it further higher from here. Outlook remains bullish. The German Yields have come into their key resistance zone. The price action in the next few days is going to be important. Failure to rise past their resistance zone can trigger a corrective fall. The 10Yr GoI is at a crucial resistance. It has to get a strong follow-through rise from here to negate our view of falling back. We will have to wait and see.

Dow remains weak but can continue to trade within the 53000-54000 range while above 53000. DAX has turned weaker amid rising Middle East tensions and can test 26000, with the 26000-26600 range likely to hold for some time. Nifty remains vulnerable below 24200 and could decline towards 23800-23600 unless it decisively breaks higher. Nikkei is holding near 64600 support, with a bounce towards 67000-68000 possible if it sustains above this level. Shanghai remains positive but is likely to stay within the 3850-4000 range while below 4000.

Brent and WTI have moved higher, while their earlier mentioned ranges of $80-$95 and $75-$90 respectively remain intact. Gold has fallen below $4500 but remains positive above $4400, with scope for a bounce towards $4600-$4700. Silver can recover towards $70 and higher while above $66. Copper remains range-bound between $6.50-$6.80 while below the key $6.80 resistance. Natural Gas is consolidating below $3.00, with a break above this level potentially opening the way towards $3.25-$3.50.

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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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