Morning briefing: EUR/INR is coming off but has limited downside to the support near 1.1300-1.1200
Trump administration has considered slashing tariffs on Chinese imports. The Dollar Index rose to 99.93 as markets took the news positively. The overall upside is capped at 101 and can eventually resume its downtrend towards 98-96. The Euro and EURINR are coming off but has limited downside to the support near 1.13-1.12 and 96-95. Eventually, the pairs can rise towards 1.16-1.18 and 99 respectively. EURJPY is holding the range of 160-164 for now. USDJPY has bounced within its 140-144 range. AUDUSD has slipped below 0.64 and is back within its old range of 0.64-0.62/61. The USDCNY has inched lower but while above 7.29/28 the targets of 7.32-7.35 are kept open. If the fall persists in Pound can extend further to 1.32-1.30 in the coming sessions. USDINR is rising in line with our view and the targets of 85.75/80 or 86 can be tested before eventually coming down. US Durable Goods and US Existing Home Sales data releases are scheduled today.
The US Treasury yields remain lower and stable. The near-term outlook remains weak. The yields can fall more from here. The German yields have bounced but are unlikely to sustain. The bearish view is intact, and the yields can fall back again. The 10Yr GoI is holding above its support. That keeps alive the chances of a relief bounce in the coming days.
Dow Jones closed in the positive yesterday but could find some resistance near 40500/800. Immediate range of 37800-40800 can hold for the near term. Dax seems to be heading towards 22000-22300. Thereafter a break above 22300 if seen can take it higher towards resistances of 22500-22600. Nifty is bullish towards 24500-25000 while above 24000-23850 support zone. Nikkei and Shanghai have risen as expected and look bullish towards 36000-36500 and 3350-3400 from where some correction can be expected.
Crude prices have declined sharply on global oversupply fears and may stay within a defined range unless key levels are breached. Gold rebounded above $3,300 after dipping, with further direction dependent on whether it holds this level. Silver shows bullish potential above $33.50, while copper remains bearish below $4.95 with room to fall. Natural gas has found support at $3.00 and could rise toward $3.40 in the near term.
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Author
Vikram Murarka
Kshitij Consultancy Services
Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.
