Morning briefing: The US treasury yields have dipped slightly

Vikram Murarka Kshitij Consultancy Services

The Dollar Index is firm and may rise towards 100.00–100.50 with downside limited to 97–96, while EURUSD continues to weaken towards 1.16 within its 1.18–1.16 range. EURINR is falling sharply and could test 101 before holding in a 101–102.50 band, and EURJPY is at crucial support near 171.50, which must hold to avoid a fall to 170, with a break above 173 needed to resume its long term bullish trend. Dollar-Yen is supported at 147 and could rebound towards 150–151, though a break lower risks 146–145. USDCNY faces resistance at 7.1950 and may pull back towards 7.17–7.16, while Aussie has broken below support at 0.6450 and looks bearish towards 0.64–0.6350. Pound is weak and could slip to 1.34, and USDINR remains under pressure after plunging to 86.9175 yesterday, with further downside towards 86.75–86.50 still likely.

The US Treasury yields have dipped slightly. But supports are there to limit the downside. The yields have room to rise further from here before reversing lower. The German yields remain lower below their resistance. Failure to rise back and breach the resistance can drag them lower in the coming days. The 10Yr GoI has risen well breaking the near-term range on the upside. While there is room to rise further, crucial resistance is coming up which can halt the rise. The yield can reverse lower after testing that resistance.

The US Treasury yields have dipped slightly. But supports are there to limit the downside. The yields have room to rise further from here before reversing lower. The German yields remain lower below their resistance. Failure to rise back and breach the resistance can drag them lower in the coming days. The 10Yr GoI has risen well breaking the near-term range on the upside. While there is room to rise further, crucial resistance is coming up which can halt the rise. The yield can reverse lower after testing that resistance.

The Dow Jones is struggling to get a strong follow-through rise. It can see a near-term fall before rising back again. Dax is inching up. The bias is positive to break the immediate resistance and rise more. Nifty has supported to limit the downside in the near term. But it has to breach its immediate resistance in order to move further higher. Nikkei and Shanghai can see a corrective fall in the near-term before resuming the broader uptrend.

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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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