Morning briefing: The US treasury yields have come down further

Vikram Murarka Kshitij Consultancy Services

The Dollar Index is trading near 98.60 and failing to see an immediate bounce back can extend the fall to 98-97 as well. Euro & EURINR have risen past 1.1650 & 102.40 but face another resistance at 1.17 & 103 respectively. Need to see whether the resistance hold or extend the rise in both the pairs. EURJPY & USDJPY have slightly inched lower but the targets of 179 & 154 are kept alive for now. USDCNY is coming off and price action around 7.10 needs close monitoring to determine whether the pair will consolidate within the 7.10–7.15 range or extend its fall toward 7.075. The Aussie has risen past 0.655 and if sustained, can extend the gains towards 0.660-0.665 as well. The Pound has bounced a bit but a break past 1.34 will be needed to extend the rise towards 1.35 as well. USDINR is trading near 88.14 on the NDF, and unless an immediate break below 88 occurs, a sustained move above 88.30 if seen could make it vulnerable to testing 88.50.

The US Treasury yields have come down. That keeps intact our view of seeing a fall. Any rise will be capped by the near-term resistances. The German yields have dipped. Failure to rise back immediately can keep alive the chances of the fall that we have been expecting towards their support. We will have to wait and see. The 10Yr GoI is hovering near the upper end of its range. Need to see if it is breaking out of the range to move higher.

The Dow and Dax have moved up today. The Dow can rise towards 47600-48000 while the Dax can face rejection from 25000-25200 region. Nifty has risen yesterday and needs a decisive break past 26000 to head towards 27000. Nikkei can test 52000 while above 50000. Shanghai is trading near the crucial resistance at 4000, a sustained break past which is needed to rally towards 4200 eventually.

Crude prices have fallen as expected amid concerns of a global crude surplus, heading towards $65-64 (Brent) and $60-59 (WTI) respectively. Gold plunged to $3985.90 but holds above $4000, keeping chances of a rise to $4100-4200 alive. Silver broke below $47 and looks weaker towards $45-44. Copper stays firm above $5.10 with scope to rise to $5.30-5.35, while Natural Gas surged on cooler US weather forecasts but faces resistance near $4.00, with possible swings between $4.40-$3.60.

Visit KSHITIJ official site to download the full analysis

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.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.