Morning briefing: Euro can rise further towards 1.0600

Vikram Murarka Kshitij Consultancy Services

Dollar Index has slipped below 107 and looks bearish towards106.00-105.50. Euro on a sustained break past 1.05, can rise further towards 1.06. EURINR above 91, can extend the rise to 91.50. USDJPY and EURJPY are coming off but immediate downside can be limited to 150 and 157/56 respectively. AUDUSD and Pound are nearing the crucial resistances at 0.63 and 1.26 respectively. USDCNY is also coming down but the deeper support at 7.225 can hold for now. USDINR above 86.50, can extend the rise towards 87.00-87.15 in the near term.

The US Treasury yields have declined further. They have room to fall more and test their key supports again. The price action thereafter will need a close watch to see if a reversal is happening or not. The German Yields remain stable. They have to sustain above their immediate support to keep alive the chances of rising back. Else they can fall more. The 10Yr GoI remains stable near the upper end of its range. The immediate outlook continues to remain unclear. Eventually we expect the yield to break the range on the upside.

The Dow Jones is holding the range of 44000-45100; a breakout on either side is required to get directional clarity. DAX has fallen slightly. While above 22300-22000, a rise towards 23000 is likely. Nifty so far manages to hold above 22800. Key support near 22800-22500, above which reversal looks possible. Nikkei is trading above 39000. While it stays above 39000, the index could move higher towards 39500-40000. Shanghai held above 3320 and moved to about 3250. A further rise towards 3400-3420 looks possible.

Crude prices may decline towards $73/72 (Brent) and $68 (WTI) in the near term. Gold and Silver have immediate support near current levels, and as long as these levels hold, we expect a bounce back towards $3000 and $33.5-34.0, respectively. Copper is likely to trade in the range of $4.8-$4.6 for some time. Natural Gas needs to surpass $3.8 to reach higher levels of $4.0-$4.2.

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Author

Vikram Murarka

Kshitij Consultancy Services

Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.

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