Morning briefing: Euro can trade sideways between 1.0350/1.0450
The Dollar Index can rise towards 109.0-109.5 in the near term while Euro, EURINR, USDJPY and GBPUSD can trade sideways between 1.0350/1.03-1.0450, 89.5-88.5/88, 158-156 and 1.26/1.2650-1.2500 respectively for the near term. EURJPY and Aussie look bearish towards 162 and 0.6150-0.6100 respectively. USDCNY continues to hover below 7.30 but as long as it holds above 7.28/25 the view remains biased for a rise towards 7.35. USDINR needs to decline from 85.65/75 to fall towards 85.50 else can extend further towards 85.80 and higher on a stronger Dollar.
The US Treasury yields have risen back. The bullish view is intact and there is room to rise more. German yields were closed yesterday on account of the New Year’s Eve holiday. The Indian 10Yr GoI has declined below the immediate support as expected. The downtrend has resumed, and the yield can fall further from here.
The Dow Jones and DAX remained flat and closed lower with a continued bearish outlook. The Dow is expected to target 42000-41800 while the DAX shows potential for further declines toward 19,500. The Nifty experienced initial weakness, falling to a low of 23460, before closing flat. Further, it looks vulnerable to see a fall towards 23200-23000. The Nikkei remained below the critical 40000 level, signaling potential consolidation within the 38000-40000 range as long as it remains under this threshold. Meanwhile, the Shanghai Composite struggled to maintain levels above 3400, retreating to 3351. Should the downward trend persist, the index may test the support at 3300.
Crude prices can sustain within the range of 75-73 (Brent) and 72-69 (WTI) for a few more sessions. Gold is holding above 2600 but needs to break above 2650 to be bullish towards 2700-2750, else a fall to 2550-2500 cannot be negated. Silver and Copper can range between 29.0-30.5 and 4.0-4.15 respectively, while above 29 and 4. Natural Gas could trade within 3.5-4.0. A break past 4 will be needed to turn bullish for the medium 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.
