Morning briefing: Euro has come down towards 1.0800
|Dollar Index strengthened yesterday and needs to sustain above 104.50 to rise towards 105. Euro on the other hand has come down towards 1.08. A break below 1.08, can trigger a fall towards 1.0750-1.0700. While the pairs USDCNY, USDJPY and EURJPY sustain above 7.25, 152 and 164 respectively, the outlook continues to remain bullish in the near term. The Aussie and Pound need to rise past 0.66 and 1.29 respectively to avoid a fall towards 0.6500-0.6400 and 1.28 on the downside. USDINR can see a gradual rise towards 83.90 in the coming weeks while EURINR needs to rise past 91 to turn bullish. Watch out for US Case Schiller and Consumer Confidence data scheduled today and FED and BoJ policy meetings on Wednesday which can keep the currencies volatile.
The US Treasury yields remain lower but stable. The near-term view remains negative for the yields to fall further from here. The Fed meeting outcome tomorrow will be important to watch. The German yields have declined below their support contrary to our expectation. If this break sustains, our earlier bullish view will go wrong, and the yields can fall more. The 10Yr and 5Yr GoI are coming down in line with our expectation. They have more room to fall from here.
Dow Jones has fallen a bit but has near term support which if holds, can lead to a rise towards 41000-41200. DAX to trade within 18000-18800 range with a bullish view. Nifty has dipped slightly. It has resistance overhead which can hold and lead to a corrective fall towards 24500. Nikkei has fallen back and looks vulnerable to see further fall while below 39000-39500. Shanghai remains bearish for the near term.
Crude prices are coming down towards their key immediate support, which if holds, can lead to a bounce back. Gold opened with a gap up above 2400 at 2430 due to change of contract and if the break sustains, a further rise towards 2460 could be seen. Silver and Copper have fallen back failing to rise past their resistance and may look to fall further from here. Natural gas continues to trade lower but the downside could be limited to 2.0/1.9.
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