Kshitij Consultancy Services Team
Kshitij Consultancy Services
Weaker New Home Sales data and strengthening of Yen led Dollar Index to fall and failure to rise past 104.50 can extend the fall further to 104-103.50. EURUSD has support at 1.0810-1.0800 which might be tested before a bounce back can be seen from there. USDJPY and EURJPY are headed down towards 152 and 165-164.50 respectively. USDCNY has reversed from the high of 7.2773 but may find support at 7.26-7.25. A broad range of 7.28-7.25 is likely to persist for a while. The Aussie and Pound continues to fall further as expected and can soon test 0.6500 and 1.28 on the downside. USDINR can fall back if the resistance at 83.75/80 holds. EURINR needs to rise past 91, else it is likely to fall towards 90.50. Watch out for the US GDP data release scheduled today.
The US Treasury yields have risen further at the far end while at the near-end, the 2Yr has declined sharply. The bounce from the support on the far-end yields is sustaining well and they can move up further. The 2Yr has limited room to fall from here. It has a strong support coming up from where it can also rise back. The German yields continue to move up in line with our expectation. The bullish view is intact, and the yields can rise further in the coming days. The 10Yr and 5Yr GoI remain vulnerable to fall more from here.
Equities have fallen sharply on disappointing Tesla and Google earnings. Dow Jones, Nikkei and Shanghai have broken below the support at 40200, 39000/38000 and 2900 and might fall further towards 39500, 37000/36000 and 2850/2800 respectively from here. Nifty can fall to 24200-24100 following the sell-off in the global markets.
Crude prices remains bearish for a fall towards their key support before a bounce back can happen. Gold and Silver have fallen back towards 2360 and 28.30 and looks vulnerable to fall more from there. Copper can fall towards 3.8 before a bounce back can be seen from there. Natural gas has recovered a bit and has scope to rise towards 2.4-2.5 in 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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