Morning briefing: Euro could trade within 1.1060 – 1.1200 for now

Vikram Murarka Kshitij Consultancy Services

Initial advances seen in the Dollar after the FOMC rate cut were limited as the index fell back to 100.50. It could test 100.50-99.50 before bouncing back. Euro could trade within 1.1060-1.12 for now and delay our expected fall to 1.10-1.0950. USDJPY and EURJPY could not break above 144 and 160 respectively and have dipped from there. Aussie is headed towards immediate resistance near 0.6850 while Pound could remain ranged between 1.31-1.33/34 for the near term. USDCNY has fallen sharply after the PBoC kept rates unchanged. Breaking below the crucial 7.08, it is now headed towards 7.02/7.00. EURINR could trade within 92-94 region for a few sessions. USDINR may have some room to test 83.60/50 before bouncing back to 83.70/80 soon. The fall below 83.70 could be short lived.

The US Treasury yields have come down again. The resistances have capped the upside as expected. That keeps intact the broader bearish view. More fall is on the cards. The German yields have room to rise further from here before resuming their broader downtrend. Resistances ahead are likely to hold and restrict the upside. The 10Yr GoI has come down again. The downtrend is intact, and the expected corrective rise is not happening.

Strong rise is seen in Dow Jones, DAX and Nikkei but all have key resistance overhead, a break above which, if seen, could be further bullish. Else they could witness a fallback. Nifty tested an all time high yesterday but has come-off a bit from there. View will remain bullish as long as Nifty stays above 25200. Shanghai is facing rejections from 2750 but as long as it holds above 2700, chances are high for it to break above 2750 and rise towards 2775-2800.

Crude prices have bounced back and are heading up towards their key resistance zone. A break above their resistance, if seen, could lead to an extended rise. Gold, Silver and Natural Gas have recovered sharply as their support level held well. Copper too has risen sharply. Metals and Natural Gas look bullish for the near 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.

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