Vikram Murarka
Kshitij Consultancy Services
The mixed outlook from the lower-than-expected US NFP, stable unemployment rate and a higher US Average Hourly earnings data on Friday took the Dollar Index down to 100.58 but managed to recover soon. Currently above 101, there is scope to test 102 on the upside. Euro can dip to 1.1050-1.10 while below 1.11. USDJPY and EURJPY have risen slightly and can rise a bit in the next few sessions while above 142 and 158. Aussie looks bearish towards 0.6650-0.66 while Pound can trade above 1.3085 and target 1.32. USDCNY has risen but needs to break above 7.12/14 to turn bullish for the medium term. EURINR has dipped as expected and a break below 93 if seen can trigger a fall to 92.50. USDINR can continue to trade between 83.80/85 and 84.00.
The US Treasury yields have inched up slightly in the early Asian session today after having fallen on Friday after the jobs report. The broader view remains bearish and any bounce from here could be short-lived. The yields are likely to fall more. The German yields continue to fall and are keeping intact our bearish view. The 10Yr GoI remains lower and stable. The bias is negative to break the immediate support and fall going forward.
Equities have fallen sharply after the release of lower than expected US NFP data. Dow Jones, Nikkei and Shanghai have fallen sharply breaking below their mentioned support and looks bearish to fall more from here. Nifty too has broken its support of 25000 but has next key support below current level. Need to see if that holds or Nifty breaks lower. DAX has come down towards 18300 and failure to bounce back from here might be vulnerable to a further fall in the coming sessions.
Weaker than expected US NFP data release on Last Friday have led to a sharp fall in the commodities. Crude prices have recovered slightly from Friday's fall and might remain ranged for a while if their key immediate support holds. Gold, Silver and Copper have fallen sharply but downside might be limited to 2500-2450, 27.40 and 3.97. Natural gas remains positive for a break above the upper end of its sideways range.
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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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