Morning briefing: Euro can soon test 1.0900 on the downside

The Dollar Index has risen past 102.75 and if sustained above current levels, can head towards 104 or higher in the near term. The Euro in line with our view can soon test 1.09 on the downside. The USDJPY and EURJPY have risen well. On the upside 150-152 and 164 respectively look like possible targets for now. Aussie, if breaks below 0.67, can get further dragged to 0.66-0.65 in the coming sessions. Watch price action closely around 0.67 to see whether it holds or not. The pound, either needs to rise past 1.31 or break below 1.30 to get further directional clarity. EURINR has slipped below 92 and may test 91 on the downside in the coming sessions. USDINR, below 84-84.10 can fall back towards 83.90/80 in the coming sessions. Watch out for the US CPI release scheduled today.

The US Treasury yields are moving up in line with our expectations. Resistances are coming up which will need a close watch to see if the rise is halting there and reversing or not. The US CPI data release today might be key in deciding whether the yields can breach the resistance or not. A soft inflation number can trigger a reversal. We will have to wait and watch. The German yields are inching up. A strong follow-through rise from here can take them higher in the coming days. The 10Yr GoI has declined sharply below the support contrary to our expectation. A consolidation looks possible before the expected rise happens. The RBI left their policy repo rates unchanged at 6.5% in its meeting yesterday.

The Dow and DAX have surged above 42,500 and 19,200, respectively, averting downside risks. Both indices maintain a bullish outlook, potentially reaching targets of 43,000 and 19,800 respectively. Nifty faced rejection near 25,300 and closed slightly lower. As noted earlier, a rise above 25,200 is necessary to keep the bullish outlook intact else a dip back to 24800 can be seen. Nikkei remains stable above the 39,000 level. Shanghai failed to hold above the 3,300-3,400 range, reinforcing a bearish outlook with a potential decline towards 3,180.

Crude prices stumble as weekly crude inventories increase. While the immediate support levels hold, a bounce back to 80-81 on Brent and 76-77 on WTI looks possible for the near term. Gold and Silver hold above their immediate support. Gold looks ranged between 2620-2700 while Silver can bounce back towards 31.0-31.5. Copper and Natural Gas continue to fall and can target 4.3-4.2 and 2.6 respectively.

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