Morning briefing: Euro can rise towards 1.0900

Vikram Murarka Kshitij Consultancy Services

Dollar Index below 104 can be vulnerable to test 102 on the downside. Euro can rise towards 1.09 or even 1.10 if Dollar Index breaks below 104, else the EURUSD can witness a corrective fall in the near term. EURINR continues to rise within the resistance zone between 94-95 region. Bias remains bearish below 95. USDJPY below 148, can extend its fall further to 145. EURJPY can remain ranged within 162-156 region for now. AUDUSD is declining a bit within its range of 0.64-0.62. Pound if sustained above 1.29, can test 1.30 on the upside. USDNCY above 7.225, can attempt to rise back towards 7.28 in the near term. USDINR is currently trading higher on the NDF but whether it rallies further to 87.25-87.50 or falls below 86.83 will have to be seen.

The US Treasury yields have inched up slightly. But key resistances are ahead which will have to be broken to move further higher. Else the chances are high for the yields to fall back again. The German yields sustain higher. The outlook is bullish, and the yields can rise further from here. The Indian 10Yr GoI remains lower. Failure to rise back from here can drag the yield lower.

The Dow Jones has moved up from a low of 42175.62 and needs to hold the support of 42000-41700 to keep the range of 41700-45100 intact. DAX in the medium term looks bullish above 23500, while above 22000, in the near term, views remain indecisive; watch price action near 23000. Nifty has sustained above 23500 and closed flat on Friday. While above 22500, a rise towards 22800-23000 looks possible. Else, it could come down to 22000-21700. Nikkei has fallen below 37000. While it remains below 37000-37400, a fall towards 36000 is likely. Shanghai is holding below immediate resistance at 3380. As long as it sustains above 3350, the outlook remains bullish to see a rise past 3380 towards 3400-3450.

Crude prices can target $71-$72 (Brent) and $68-$70 (WTI) on the higher side while remaining above their respective support levels. Gold can rise towards $2,970-$3,000 while holding above $2,900. Silver and Copper can continue to decline towards $32.5-$32.0 and $4.6-$4.5, respectively. Natural Gas can break above $4.6 and rise towards $4.8-$5.0 in the near term.

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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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