Team Kshitij wishes a very happy and prosperous Diwali
The Dollar Index initially rose to the high of 104.43, led by stronger US ADP Employment release but later started coming on lower-than-expected US GDP. Only a sustained rise past 104.50 can take it higher towards 105-105.50. Overall, the view remains bearish towards 103.00-102.50. Euro and EURINR have risen well within the respective ranges of 1.0775-1.0850/09 and 90.50/90-91.50, while the Pound can test 1.2900. The expected rise in USDJPY and EURJPY to 155 and 168 cannot be fully ruled out until a strong break below current levels is seen. Watch out for the BOJ policy meeting scheduled today where the interest rates are likely to remain steady at 0.25%. Aussie can fall towards 0.65-0.6470 region before attempting to bounce back higher. USDCNY is widely ranged within 7.1450-7.11 region. USDINR, if opens near 84.08 can rise towards 84.10/12. Overall, the range of 84.00-84.12 can remain intact. Watch out for the US PCE and Personal Income data release scheduled today and NFP tomorrow.
The US Treasury yields continue to move up in line with our expectations. The bullish view is intact. There is room to rise further before the broader downtrend resumes. The US PCE (2.37% (YoY) in September) data release today will be important. A low PCE number can be negative for the yields. The German yields are coming closer to their resistance. The price action in the coming days will need a close watch to see if a reversal is happening or not. The 10Yr GoI has come down into its previous narrow range again. The sideways consolidation can remain in place for some time before a rise happens. Bias remains bullish.
Global equity indices remain under pressure, closing near the recent session lower. The Dow Jones faced resistance near 42500, subsequently retreating below 42200. However, while support at 42000-41800 holds, the index retains a bullish outlook with a potential upside toward 43,500-44,000. The DAX index tested key support at 19200, briefly dipping to 19201 before partially recovering. A further test of 19000 is possible before a potential rebound towards 19800-20000. In India, the Nifty index continues to show weakness, unable to gain above 24500. While trading below 24600, the index remains vulnerable to further declines toward 24000 or lower. Japan’s Nikkei index opened lower but remains above the 39000 level, keeping the near-term outlook positive, with the potential to advance to 40,000 and beyond. Meanwhile, the Shanghai Composite trades near the lower boundary of its current range at 3250. This range could hold with movement between 3250 and 3350; however, a breakdown below 3250 may prompt a further decline toward 3200-3150.
Crude prices saw some recovery after the US weekly EIA report showed a draw in the crude stockpiles. Near term view remains intact to see a fall towards support levels of $68 on Brent and $65 on WTI. Gold tested its immediate resistance and could fall back to 2750 in the near term before continuing its uptrend. Silver has fallen but could bounce back to 35.0-35.5 while above 33.5. Cooper remains ranged between 4.43-4.30 for some time. Natural Gas looks bearish towards 2.6-2.4.
Visit KSHITIJ official site to download the full analysis
The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
Recommended Content
Editors’ Picks
AUD/USD appreciates as US Dollar remains subdued after a softer inflation report
The Australian Dollar steadies following two days of gains on Monday as the US Dollar remains subdued following the Personal Consumption Expenditures Price Index data from the United States released on Friday.
USD/JPY consolidates around 156.50 area; bullish bias remains
USD/JPY holds steady around the mid-156.00s at the start of a new week and for now, seems to have stalled a modest pullback from the 158.00 neighborhood, or over a five-month top touched on Friday. Doubts over when the BoJ could hike rates again and a positive risk tone undermine the safe-haven JPY.
Gold downside bias remains intact while below $2,645
Gold price is looking to extend its recovery from monthly lows into a third day on Monday as buyers hold their grip above the $2,600 mark. However, the further upside appears elusive amid a broad US Dollar bounce and a pause in the decline of US Treasury bond yields.
Week ahead: No festive cheer for the markets after hawkish Fed
US and Japanese data in focus as markets wind down for Christmas. Gold and stocks bruised by Fed, but can the US dollar extend its gains? Risk of volatility amid thin trading and Treasury auctions.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.