Morning briefing: Euro can head towards 1.0800 in the near term
|The Dollar strengthened against major currencies after the victory of the Republican Donald Trump in the US Presidential Elections. The index has immediate resistance around 105.50/60 below which it can move lower within its range of 150.50/60-103. Euro, if sustained above current levels, can head towards 1.08 or higher in the near term. EURINR found support around 90, above which a revised range of 90-92 can hold for some time. USDJPY is trading near the upper end of its range of 150155, while EURJPY is oscillating within 165-167 region. USDCNY has risen past our target of 7.1751 and the next target is coming around 7.22 but whether it will happen or not is uncertain. Stimulus measures policy scheduled tomorrow might shed some light on where the Yuan might be headed. Aussie tested 0.6512 before recovering from there. A broad range of 0.65-0.67 can hold in the near term. Pound had slipped below the lower end of its range of 1.3150-1.2900 but is currently back within it. BOE, in the meeting today is expected to cut the rates by 25 bps if so, the pair can come down. USDINR rose sharply to the high of 84.28 before cooling down a bit. RBI might be active today to sell the Dollars as a resistance is also coming around 84.35 below which RBI has room to push the pair back towards 84.10 in the coming sessions. Also watch out for the FOMC policy meeting scheduled today.
The US Treasury yields have surged after the Presidential Election outcome. The Yields are poised near a key resistance. They have to reverse lower from here immediately in order to keep intact our view of seeing a fall back. A strong follow-through rise from here will prove that view wrong and take the yields further higher from here. The US Federal Reserve meeting outcome tonight will be key in deciding the path for the yields from here. The German yields remain higher. The outlook is bullish, and the yields have room to rise more from here. The 10Yr GoI retains its sideways range and can continue to do so for some more time. The bias is positive to get a bullish breakout of this range going forward.
Dow Jones has welcomed President Donald Trump by surging above 43700 with resistance near 44000/44500 potentially limiting further gains in the short term. Market participants should cautiously monitor price action around the current levels to assess market direction. DAX initially rose to 19563 but then plummeted to the support of 19000. In India, the Nifty attempted to break past 24500 before closing just below that level. Further, a rise past 24600 is required to move higher to 25000 and beyond. As anticipated, Nikkei rose above 39500 to a high of 39884 before falling to the current level. While below 39500, a fall towards 38500-38000 looks possible. On the other hand, Shanghai failed to sustain above 3400. Currently, the index trades near 3400 but a sustained rise past 3400 is needed to bring 3500 into the picture, else we may expect a decline in the near term.
Most of the energy and metal prices have seen sharp movement as the Dollar surged after the Donald Trump victory. Crude prices can fall towards their immediate support levels of 71 (Brent) and 67 (WTI) in the near term and trade sideways for some time. Gold, Silver and Copper have plunged below their immediate support levels. Gold and Silver can test their interim support levels now before bouncing back higher towards 2750-2800 and 32-33 respectively while Copper needs to sustain below 4.3 to be bearish towards 4.2-4.1. Natural Gas remains bullish towards 2.9-3.0 in the near term.
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