Morning briefing: Euro can trade within 1.1060-1.1200

Vikram Murarka Kshitij Consultancy Services

The Dollar index needs to see a rise past 101 to turn bullish towards 102 in the coming sessions while Euro can trade within 1.1060-1.12. USDJPY and EURJPY can test 145/146 and 162 in the near term. Aussie needs to see a rise past 0.6850, else may fall back towards 0.67/66. The pound could remain ranged between 1.31-1.33/34 for the near term. USDCNY has immediate support around 7.0250, a bounce from where can negate a fall to 7.00 or lower in the coming sessions. EURINR could trade within 92-94 region for a few sessions. USDINR may have some room to test 83.30/35 but there could be interim support at 83.40. However, it may rise towards 83.60 by end of the week.

The US Treasury yields have risen back again on Friday. Resistances are ahead to cap the upside and trigger a fall again. Overall, the downtrend is still intact, and the yields can fall more. The German yields are on a corrective rise. There is room to rise further from here to test their resistances. Thereafter the downtrend can resume. The 10Yr GoI remains bearish for a fall.

Dow Jones sustains higher and could target 42700-42750 while it remains above 41750. DAX has fallen sharply last Friday failing to rise past 19000 but support is seen near 18600 which may hold and lead to a bounce back from there. Nifty continues to rise and can target 26000-26200. Shanghai looks bullish towards 2800.

Brent and WTI can rise towards $77 and $74-75 respectively. Gold might face resistance at 2650 but our broader view will remain bullish to see an eventual break above it and to target new highs. We need to see if that breaks happen just now or after some consolidation. Silver has scope to rise further while above 31-30. Copper has dipped slightly but downside seems limited to 4.25-4.20. Natural Gas has risen well towards 2.5 as expected and has room to rise further from here.

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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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