Morning briefing: Euro is holding well below 1.1200
|The Dollar Index saw some relief yesterday as the US New Home Sales data came out stronger at 716K than expected at 693K. Still, a strong break past 102 will be needed to make the outlook bullish. Else the current rise could be short-lived to 101.50-102. Euro is holding well below 1.12 for now and can extend the fall towards 1.1050-1.10 in the coming sessions within very near term range likely to hold between 1.12 and 1.11. USDJPY and EURJPY have upside limited to 144-145 and 162 respectively from where they are likely to fall back towards 142-140 and 158-157 in the medium term. Aussie tested 0.69 but could not sustain. If the fall continues, it can be vulnerable to test 0.68.67 on the downside. The Pound slipped below 1.34 and now looks further bearish to 1.32 in the near term. USDCNY could remain bearish while below 7.03. EURINR could trade within 92-94 region for a few sessions. USDINR can trade within 83.40/50-83.70 region for a while. US GDP and the US Durable goods are the important data release scheduled today.
The US Treasury yields have moved up. But resistances are there to cap the upside. The broader downtrend is intact, and the yields are likely to fall back again. The US PCE (2.5% YoY in August) data release tomorrow will be important to watch. A fall in PCE from here can be negative for the yields. The German yields are coming closer to their resistance zone which we expect to hold and keep the downtrend intact. We can expect the yields to fall again in the coming days. The 10Yr GoI has resumed its downtrend. It can fall more from here and then possibly reverse higher after testing the upcoming support.
Dow Jones has fallen back sharply but has got support at 41750-41700 region. While that holds, view is positive to see a break above 42250 and target further upside. A break below 41700, if seen, could trigger a corrective fall. DAX has come down and looks likely to consolidate between 18600-19100 for a while before a break above the upper end of the range is seen. Nifty remains higher and might test 26200 on the upside before a corrective dip might be seen from there. Nikkei and Shanghai have scope to rise towards 39000-39500 and 3000-3100.
Brent and WTI have fallen back and might fall further while they stay below $75-76 and $72 respectively. Gold, Silver and Copper have key resistances overhead which have to be broken for increased bullishness or else they could fall in the near term. Natural Gas is stuck in a narrow range but outlook seems bearish while below the resistance at 2.9-3.0.
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