Morning briefing: EUR/USD breakdown below 1.0300 opens door to 1.0200

Vikram Murarka Kshitij Consultancy Services

The Dollar Index remains bullish towards 110-111 in the near term, while Euro on a confirmed break below 1.03 can drag the pair to 1.02 or even 1.00 in the medium term. EURINR and AUDUSD need to see a decisive break on either side of their respective ranges of 90-88 and 0.63-0.62 for further directional clarity. USDJPY on a sustained rise past 158.50, can head towards 160 or higher in the coming sessions. Pound appears bearish towards 1.22 or even 1.20 on the downside. EURJPY has slipped slightly below 163 and can get extended to 162-160. USDCNY can gradually head towards 7.35. USDINR is rising as expected and can test 86 in the near term.

The US Treasury and the German yields continue to remain higher. Both the yields have room to rise further from here. The German yields are coming close to a key resistance though and the price action after testing the resistance will need a close watch. The US non-farm payroll (NFP) and the unemployment data release today will be an important data release to watch today. The 10Yr GoI has dipped. A near-term fall is likely before a rise happens.

The Dow Jones was closed yesterday in observance of the National Day of Mourning for Jimmy Carter. DAX initially fell to test the support at 20200 before recovering slightly. While the index remains above 20200, a rise toward 20700 is possible. Nifty fell during the session yesterday but managed to sustain and close above 23500. A break below 23500 could lead to further decline towards 23000. We need to watch cautiously. Nikkei, trading within the range of 38000-40000, is moving lower, and a break below 39000 could push the index down to 38000. Shanghai continues to oscillate around 3200. While it remains below 3250, the index is vulnerable to a decline toward 3150.

Crude prices remain below their respective resistance levels and appear bearish, with potential declines towards $75-74 (Brent) and $72-71 (WTI). Gold, Silver, Copper, and Natural Gas have risen and may continue to rise towards 2720-2750, 31.5-32.0, 4.4-4.5, and 4.0, respectively, 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.

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