Morning briefing: Euro has potential to rise back towards 1.0500

Vikram Murarka Kshitij Consultancy Services

Watch out for the BOC and FOMC scheduled today and ECB tomorrow. The Dollar Index at the moment appears uncertain on whether it will head towards 109 and higher or it will test deeper support around 106.00-105.50. The FOMC can shed some light on where the index might be headed. The Euro has fallen a bit but above 1.04, has potential to rise back towards 1.05 and higher. Only a break below 1.04 can be bearish for pair. EURINR can trade within 91-90 region for a while. USDJPY and EURJPY needs to see a break on either side of their respective range of 155-157 and 164-160. AUDUSD and Pound are trading lower within their ranges of 0.63-0.62 and 1.26-1.24. USDCNY is closed today. USDINR is hovering near the upper end of its range of 86.20-86.60 region, need to see whether the rise extends past 86.60 or not.

The US Treasury yields continue to come down. The can fall further and test their support before resuming the broader uptrend. The US Fed meeting outcome tonight will be important to watch. Market expects the Fed to keep the rates unchanged in its meeting today. The German yields have bounced. But resistance ahead can cap the upside and drag the yields lower again. The ECB meeting outcome tomorrow will need a close watch. The 10Yr GoI has good support which is likely to limit the downside now. We can expect the yields to rise going forward.

The Dow Jones and DAX have risen well. The Dow Jones remains bullish and could target 45100. Similarly, the DAX is poised for a rise towards 21500-21900. Dow Jones could target 45100, and DAX is expected to witness a rise towards 21500-21900. The Nifty, having closed below 23000, appears weak and is at risk of further declines. The index may test lower levels at 22800-22500 before any potential reversal. Nikkei is holding above 39000. Further, the index is expected to hold the range of 38000-40000.

Brent and WTI have bounced back from their respective support levels and could rise towards $79-81 and $75-77, respectively. Gold remains bullish, targeting $2800-2850, while Silver is likely to remain in a range between $31.5-30.0. Copper and Natural Gas retain their bearish outlooks, with targets of 4.1 and 3.0-2.8, respectively.

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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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