Vikram Murarka
Kshitij Consultancy Services
The Dollar Index has been coming off sharply and a break below 101 can drag it towards 100.5-99.5 in the medium term. Euro has surged past 1.11 and can test 1.1150/75-1.12 before possibly topping out. The USDJPY and EURJPY can hold above 145 and 160/158 and move higher in the medium term. The Pound and Aussie have crucial resistances at 0.6775/0.6850 and 1.30/3050 respectively from where a decline is possible. USDCNY can remain volatile within a region of 7.18-7.12 with a dip to 7.12. EURINR has surged past the mentioned resistance of 93 and a decisive break past 93.50 can take it higher towards 94 in the near term. USDINR tested 83.75 before rising back from there in line with our expectation. A confirmed break below 83.75 will be needed to bring 83.70/60 into the picture. Else, it may attempt to rise back towards 83.90/84.00.
The US Treasury yields have declined below their intermediate support. That keeps intact our bearish view. The yields can fall more from here. The German yields are also coming down inline with our expectation. The view remains bearish and there is room to fall further. The 10Yr GoI broke the range on the downside but did not sustain. The sideways range seems to remain intact. The bias is bearish to get a sustained break below the range and a fall going forward.
Dow Jones and Nikkei have dipped as their respective resistances are holding and they might fall further from here. DAX has come down a bit but might get support at 18200 which will keep the near term bullish view intact. Nifty remains bullish for the near term. Shanghai has fallen further and can come down towards 2800.
Crude prices continue to fall but have crucial support coming up, which if holds, can produce a bounce back in the medium term. Gold, Silver and Copper can fallback while they remain below 2600, 30.00 and 4.25-4.22. Natural gas appears range bound for the near term.
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The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
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