Morning briefing: Euro can test 1.0550-1.0600

Vikram Murarka Kshitij Consultancy Services

Dollar Index failed to sustain its rise past 107 and slipped below it. The index can have an upside limited to 108 and either upon testing it or from current levels itself, it can start falling back. Euro if sustains the ongoing rise, can test 1.0550-1.0600 in the coming sessions. EURINR needs to see a decisive break on either side of the range of 88-90 for further directional clarity. Aussie continues to trade below 0.64 but a fall below 0.6350-0.63 is not anticipated. It can bounce back higher upon testing 0.6350-0.6300 on the downside. The Pound can also extend its fall within its earlier range of 1.2750-1.2450 on a confirmed break below 1.26. USDCNY continues to rise further and while above 7.25, the view remains bullish towards 7.30-735. USDJPY and EURJPY are rising as expected but immediate resistances are coming around 155 and 163 regions respectively. Need to see whether it holds and pushes the pair back to previous levels or not. USDINR, for the current week, can trade within 84.85-84.70 region. Broadly a range of 84.90-84.68 can hold till the end of Dec-24.

The US Treasury yields have risen further and are heading up towards their key resistances. The price action after testing this resistance will need a close watch. The US Federal Reserve meeting outcome on Wednesday will be a key event for this week. Their economic projection will be very important to watch. The German yields continue to rise. The outlook is bullish. There is room to rise more. The 10Yr GoI has dipped slightly but can rise back again. There is room to rise in the near-term before a reversal is seen again.

The Dow Jones is bearish towards 43000-42000 while below 44000. Similarly, DAX could rise towards 20700-21000 while above 20200. Nifty plunged to 24200 followed by a reversal above 24700. While it sustains above 24700, a rise towards 25000 looks possible. The Nikkei is steady at around 39,500, with the immediate outlook remaining uncertain. A break above this level could lead to a rise toward 40000, while a dip could push it down to 39000. Shanghai trades below 3400 and keeps our view bearish, targeting 3350-3300.

Brent and WTI have moved up and can target 75.5-76.0 and 72.5-73.0 respectively. Gold, Silver and Natural Gas have fallen. A broad range of 2600-2750, 30.5-32.5, and 3.2-3.6 can hold for the upcoming weeks. Copper looks bearish towards 4.10-4.05 while below 4.20.

Visit KSHITIJ official site to download the full analysis

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.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

Gold posts modest gains above $5,050 as US-Iran tensions persist despite strong labor data

Gold price trades in positive territory near $5,060 during the early Asian session on Thursday. The precious metal edges higher despite stronger-than-expected US employment data. The release of the US Consumer Price Index inflation report will take center stage later on Friday.

Bitcoin holds steady despite strong US labour market

Bitcoin briefly bounced from $66,000 to above $68,000 but slightly reversed those gains following Wednesday's US January jobs report. The top crypto is hovering around $67,000, down 2% over the past 24 hours as of writing on Wednesday.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.