Morning briefing: Euro could test 1.0650

Kshitij Consultancy Services Team Kshitij Consultancy Services

Good Morning!

The Dollar Index tested 106.13 as the Euro weakened below 1.07 after the ECB council meeting and on remarks of more rate cuts by ECB chief economist. Euro could test 1.0650 or even 1.06 going forward. Dollar-Yen and EURJPY are attempting to rise towards 161/162 and 172 respectively and can see bullishness on the absence of any intervention from the BOJ. Watch price action closely around the current levels. Aussie & Pound continue to trade sideways within 0.6580-0.6720 and 1.26-1.28 respectively. USDCNY is bullish towards 7.28. EURINR can trade within 89.00-90/91 region for some time. USDINR tested 83.61 yesterday before cooling down. Overall, a range of 83.67-83.40 is likely to hold in the near term. USDINR could move up if the Euro weakness further from current levels. US GDP data release would be important to watch today.

The US Treasury yields have risen back sharply. A further rise from here will negate our view of seeing a fall to test their supports. The US GDP data today and US PCE numbers tomorrow are important to watch. The German yields are rising well from their support as expected. While this sustains, a further rise is possible in the coming days. The 10Yr and 5Yr GoI are inching up in line with our expectation. They have room to rise further going forward.

Dow Jones has managed to hold above its support and while above it, there could be chances of rise in its coming sessions. DAX is stuck between 18400-18000. While below 18400, it would remain vulnerable to a break on the downside and fall further. Nifty continues to rise and has scope to test its key resistance overhead before a corrective fall can be seen. Nikkei has fallen back but downside seems limited to 38500-38000. Shanghai has to break above 3000 to turn bullish. Else could be ranged between 2900-3000 for a while.

Crude prices, Copper and Natural Gas remains bearish for the near term. Gold has fallen as expected. It has to break below 2300 decisively to become further bearish. Else it may continue to be range bound within 2300-2400 for a while. Silver has bounced a bit but broader outlook is still tilted towards bearishness.

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Kshitij Consultancy Services Team

Kshitij Consultancy Services

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