Morning briefing: Pound can extend the rise towards 1.2800

Vikram Murarka Kshitij Consultancy Services

Dollar Index needs to see a rise past 107.25 to turn bullish again. Euro can extend the fall towards 1.04. EURINR can trade within a narrow region of 91.50-90.50. USDJPY can rise towards 153 or even 154 as anticipated and EURJPY has immediate downside limited to 157/56. AUDUSD is trading within a narrow range of 0.63-0.64, while Pound has risen past 1.26 and if sustained, can extend the rise towards 1.28 in the near term. USDCNY can rise back towards 7.30. USDINR can extend the rise towards 87.00-87.15 in the near term. US Housing starts data release is scheduled today.

The US Treasury yields have risen back sharply. A further rise from here will reduce the chances of the dip to test their support mentioned yesterday. It can then take the yields further higher. The German yields remain stable. While they sustain above their support the outlook is bullish to see more rise from here. The 10Yr continues to dip. A break below the immediate support can take it down towards the lower end of its range.

The Dow Jones remains steady and is holding the range of 44000-45100 intact. DAX has risen up and is heading towards 23000. Nifty is holding above 22800 and could rise past 23000 and rise to 23500. A break below 22800-22700 would extend the fall to 22500. Nikkei trades lower but is holding above 39000. While it stays above 39000, a rise towards 39500-40000 looks possible. Shanghai initially came down to 3320 and has risen to 3350. A sustained rise past 33550 would take the index towards 3400-3420.

Crude oil prices remain bearish, with a target of $73/$72 for Brent and $68 for WTI in the near term. Gold and Silver have risen as expected and could continue to rise toward 3000 and 33.5-34.0, respectively, in the coming weeks. Copper must stay below 4.6 to remain bearish toward 4.4; otherwise, it may range between 4.57-4.8 for some time. Natural Gas is facing resistance near 4.0, and as long as this holds, a decline toward 3.8-3.6 is possible in the coming sessions.

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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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