Morning briefing: Euro has support coming at 1.1300-1.1200

Vikram Murarka Kshitij Consultancy Services

The Dollar Index on a break below 99 can get dragged towards 98-96. The Euro and EURINR have supports coming at 1.13-1.12 and 96-95.5 region, above which we retain our view of seeing a rise towards 1.16-1.18 and 99. EURJPY and USDJPY are holding the ranges of 160-164 and 140-144 respectively. AUDUSD needs to rise past 0.645 level to test 0.66 on the upside. Else, it can continue to trade within 0.645-0.635 range. The USDCNY is trading near the support at 7.28. Failure to sustain above it can drag it further to 7.26/25. Pound is headed to the higher resistance at 1.35 region. USDINR is trading near 85 region. Need to see whether it holds above it or extends the fall to 84.80.50 in the coming sessions. US Case Shiller & US Consumer Confidence data release scheduled today.

The US Treasury yields are moving down as expected. The price action indicates that they can break their immediate support and see an extended fall in the coming days. The US PCE data release due for tomorrow will need a close watch. The German yields have risen further. This is just a corrective rise within the broad downtrend. The upside will be capped, and the fall can resume in some time. The 10Yr GoI has moved up well and can rise further to test its key resistance. The price action around the resistance will need a close watch.

The Dow is sustaining at higher levels and can move towards the upper end of its 37,800–41,000 range. The DAX has dipped slightly and needs a strong break above 22,600 to rise towards 23,000; otherwise, it could fall back to 22,000–21,800. Nifty rebounded sharply, keeping the broader bullish outlook intact, with a break above 24,360 likely opening the path towards 24,500–25,000. Nikkei remains bullish and is moving towards 36,500–37,000, where a medium-term correction may occur. Shanghai remains flat but holds above 3,250, keeping hopes alive for a gradual rise towards 3,350–3,400.

Crude prices can fall towards $64–$62 (Brent) and $60–$58 (WTI) in the near term. Gold is holding above $3,300 and could gradually rise to $3,400–$3,500, while a break below $3,270 may trigger a deeper drop. Silver found support near $32.50 and may head towards $34–$35 if this level holds. Copper remains under pressure below $4.95, with a downside target of $4.60–$4.40. Natural gas has risen as expected and may test resistance at $3.50–$3.60 before a likely pullback to $3.00.

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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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