Morning briefing: Euro could continue to rise towards 1.1700

Vikram Murarka Kshitij Consultancy Services

Currencies look mixed. The Dollar Index looks bearish while Euro could continue to rise towards 1.17. USDCNY, USDJPY and EURJPY looks bearish while EURINR can rise towards 112 in the coming days. Aussie and Pound look bullish for the near term. USDINR rose to close above 95 yesterday. An initial decline towards 94.50 can be expected before the medium to long term uptrend resumes.

The US Treasury and the German Yields have risen sharply yesterday. Both the Treasury and the German Yields look strong and have room to rise more from here. The ECB meeting outcome today evening and the US CPI data release tomorrow are important events to watch for. The 10Yr GoI remains stable and is hovering around 6.95%. While a narrow movement can continue for some more time, the upside is open to see more rise eventually.

Dow remains weak near 52500, with a break below this level opening the way towards 52000. DAX has weakened amid rising Middle East tensions and can fall towards 25000. Nifty remains under pressure below 23500 and can open near 23200 and decline towards 23000. Nikkei needs to hold above 64000 for a bounce towards 67000-68000. Shanghai remains range-bound between 3850-4000 while below 4000.

Brent and WTI have surged amid the escalating US-Iran conflict, with further gains towards $105-$110 and $100-$105 possible. Gold remains positive above $4300 and can rise towards $4600. Silver needs a sustained break above $70 for a move towards $75-$80. Copper has broken above $6.80 and can rise towards $7.00 and higher if sustained. Natural Gas is testing $2.80 support, with a break below it opening the way towards $2.70-$2.60.

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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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