Morning briefing: The US treasury yields have inched up

Vikram Murarka Kshitij Consultancy Services

The Dollar Index can be vulnerable to fall towards 97 or even 96 while below 98. The Euro is moving higher within the 1.16-1.18 range. EURINR is stuck within the 103-104 range. EURJPY and USDJPY can hold the immediate ranges of 174-172 and 149-146 respectively in the near term. USDCNY needs to see a break past 7.1250 to bring higher levels into picture. Else, a pull back to 7.11 can happen initially. The Aussie and Pound face immediate resistance at 0.67 and 1.36 respectively. USDINR can trade within the 88.75-88.00 region while below 88.50-88.75.

The US Treasury yields have inched up. Resistances can cap the upside if there is a rise from here and keep the yields under pressure. There is room on the downside for the Treasury yields to fall more in the coming days. The German yields have bounced but can be short-lived. They can fall back to test their support. Thereafter the broader uptrend can resume. The 10Yr GoI has risen and remains well within the range. It can continue to oscillate sideways for some time before declining eventually.

The Dow looks bullish above strong support at 45500–45000 with potential to rise towards 47000–48000, while the DAX remains range-bound between 23000 and 24500 with scope for a near-term dip to 23000 if it stays below 24000. Nifty has broken above 25000 and can head higher towards 25250 and 25500 with support at 25000–24800. Nikkei stays bullish for a move towards 45000–45500 before a possible reversal, while Shanghai needs a break above 3900 to test resistance at 4000.

Brent and WTI remain weak below their resistances, keeping the outlook bearish for a fall towards $65–$64 and $60–$58 respectively. Gold is attempting to break above $3,700, and a sustained move higher can open the way towards $3,750–$3,800 in the coming weeks, while Silver holds firm above $42 with potential to rise towards $43–$44. Copper has faced resistance near $4.70 and may dip further towards $4.60–$4.55, while Natural Gas is likely to decline towards $2.85–$2.80 in the near term.

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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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