Morning briefing: Euro can move within the earlier 1.0700/1.0900 range

Powell yesterday commented that the central bank may not wait too long for a rate cut which sent the Dollar Index down, but markets recovered overnight. Dollar Index can bounce higher while above 104, the Euro on the other hand can move within the earlier range of 1.09-1.07. USDJPY and EURJPY are holding well above their respective supports of 157-156 and 171/170.50 and can rise back in the coming sessions. USDCNY above 7.26, can head towards 7.28 in the medium term. Aussie and Pound are hovering below their resistance at 0.68 and 1.30 respectively. USDINR can continue to trade between 83.35-83.65 region with bias to the upside. EURINR has risen past 91 and if sustained can extend it further towards 91.50-92 while above support at 90.80.

The US Treasury yields have bounced back. Need to see if this bounce sustains in order to avoid the extended fall from here. The German yields have dipped slightly. Supports are there to limit the downside and keep the broader uptrend intact. The 10Yr and 5Yr GoI are coming down inline with our expectation. They have room to fall further from here.

Dow Jones has moved up again after FED chair Powell's comment, who said that the US CPI readings over the Q2 have showed more progress and have provided confidence to policymaker that inflation is headed down to the Fed's 2% target. The Dow Jones need a sustained break above 40250 to strengthen the bullish case and to avoid the danger of seeing a corrective fall. DAX has fallen back but has near term support, while above which, bias will remain positive to see a rise towards 19000-19200. Nifty sustains higher above 24500 and remain bullish to target news highs. Nikkei sustains above 41000 and while above it, chances of rise towards its key resistance cannot be ruled out. Shanghai lacks follow through rise but still has potential to rise towards 3000.

Crude prices have dipped and remains bearish to come down further from here. Gold has scope to test 2460-2500 before a corrective fall occurs. Silver remains subdued whereas Copper has fallen back but both have near term supports coming up which may hold and lead to a bounce back. Natural gas is heading towards 2.1-2.0 as expected from where a bounce back can be seen.

Visit KSHITIJ official site to download the full analysis