Morning briefing: EUR/USD has interim resistance at 1.0870/80

Kshitij Consultancy Services Team Kshitij Consultancy Services

Dollar Index may remain above 104 to target 105 while EURUSD has interim resistance at 1.0870/80, below which the pair can possibly test 1.08 soon. The pairs USDCNY, USDJPY and EURJPY have recovered well from the lows of 7.2193, 151.93, and 164.83 and the outlook appears bullish in the near term while the respective supports hold. The Aussie and Pound need to rise past 0.66 and 1.29 respectively to avoid a fall towards 0.6500-0.6400 and 1.28 on the downside. USDINR remained stable above 83.65 and can now be bullish towards 83.90 in the coming weeks while EURINR needs to rise past 91 to turn bullish. Crucial to watch the FOMC policy meeting this week, scheduled on 31st July 2024.

The US Treasury yields have declined sharply on Friday after the US PCE data release. The PCE for July came in at 2.51% (YoY) down from 2.6% in June. The Treasury yields can fall further this week. The US Fed meeting on Wednesday will need a close watch. The German yields are poised near their crucial supports which must hold to keep the uptrend intact. We will have to wait and watch. The 10Yr and 5Yr GoI have bounced back from their lows on Friday. But the broader trend remains down and any rise from here will be capped.

Dow Jones has risen back sharply above 40500. This has reduced the danger of falling and it may look to rise further while above 40000. DAX can rise towards 18600-18800. Nifty has surged, breaking above 24500 and is likely to test key resistance ahead, which if holds, can lead to a fallback. Nikkei has bounced back sharply but might face rejections from 39000-39500. Shanghai remains subdued and looks bearish for a fall towards 2850-2800 in the near term.

Crude prices have fallen back sharply and are likely to test key immediate support before a bounce back can happen. Gold, Silver and Copper have risen further but have resistance overhead which they need to overcome to strengthen the bullish case or else could witness a fallback. Natural gas sustains above 2.0 and while above it, the broader view will remain bullish.

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Kshitij Consultancy Services Team

Kshitij Consultancy Services

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