Morning briefing: Euro if sustains the ongoing rise, can test 1.0550-1.0600
|The Dollar Index is hovering near the support around 106.75, a decisive break below which can take it to 106.00 or even lower. Euro if sustains the ongoing rise, can test 1.0550-1.0600 in the coming sessions. EURINR needs to see a decisive break on either side of the range of 88-90 for further directional clarity. Aussie can have a limited downside to 0.6350-0.6300 for now. The Pound has bounced well from the level of 1.26 and, if sustained can extend the rise towards 1.28 in the coming sessions. USDCNY continues to rise further and remains bullish towards 7.30-7.35. USDJPY and EURJPY can have the upside limited to 155 and 163 respectively for now below which a corrective fall can be witnessed in the near term. USDINR has risen past 84.85 contrary to our expectations. On the NDF it is currently trading higher. If it fails to see an immediate dip in the onshore markets below 84.90, then it could be vulnerable to head towards 84.95-85.00 soon. US Retail Sales, US Industrial production, US Capacity Utilization, and German IFO data releases are scheduled today.
Market seems to be waiting for the Federal Reserve meeting outcome tomorrow as the US Treasury and the German yields remain stable. The Treasury yields have room to rise from here to test their resistance. The US Fed meeting will determine whether there can be an extended rise or a reversal thereafter. German yields remain bullish and can rise more. The 10Yr GoI remains stable. They can rise in the near-term before reversing lower again.
The Dow Jones continues to decline, maintaining our bearish outlook with a target range of 43,000-42,000. The DAX has dropped to 20,300, with interim support at 20,200. A bounce to 20,500-20,700 can soon be possible while above 20200. The Nifty failed to sustain above 24,800 and has slipped lower. However, as long as it remains above the support zone of 24600-24500, the view remains bullish towards 25,000. The Nikkei initially rose to 39,778 but was unable to sustain at higher levels and is currently trading near 39,500. A follow-through rise is needed to achieve our target of 40,000-41,000. Meanwhile, the Shanghai remains under pressure, trading below 3,400. As long as it stays below this level, the risk of a decline toward 3,350-3,300 persists.
Crude prices have sustained a fall after disappointing Chinese Retail Sales data. The prices can rise towards 75.5-76.0 (Brent) and 72.5-73.0 (WTI) in the near term. Gold and Copper look bearish towards 2600 and 4.05 respectively while Silver and Natural Gas can bounce back towards 31.5-32.5 and 3.4-3.6.
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