Vikram Murarka
Kshitij Consultancy Services
The Dollar Index rose well and if sustained above current levels can rise towards 104-105 in the near term while the Euro, if falls further can test 1.08-1.0770 before attempting to rise back. USDJPY and EURJPY can have upside limited to 152 and 164 respectively. Aussie and Pound look bearish towards 0.6650-0.66 and 1.2950-1.29 respectively in the coming sessions. USDCNY has risen well but still needs to see a rise past 7.1240 to head towards 7.14-7.15. USDINR is likely to remain ranged within 83.98-84.12 region. EURINR slipped below 91 and failure to rise past it can make it vulnerable to test 90.50-90 in the near term.
The US Treasury yields have surged. Looks like there can be an extended rise from here before the broader downtrend resumes. The German yields have risen back sharply. That keeps alive our bullish view. More rise is on the cards. The 10Yr GoI is moving up towards the upper end of its broad range. The bias is bullish to break the range on the upside and see more rise, if not immediately but eventually.
Major equity indices closed lower as key levels held firm. The Dow Jones failed to break above its interim resistance of 43400 and dropped to close below 43000, opening the possibility of testing the supports of 42700 and 42500 before moving higher towards 44000. Similarly, the DAX reversed from 19645 and slipped below 19500; however, while it sustains above 19400 and 19200–19000, a rise towards 19800–20000 remains on the table. The Nifty is also under pressure, struggling to move past 25000, and may test support near 24600. Meanwhile, the Nikkei sharply fell below 39000, reaching a low of 38200 before a modest recovery. Shanghai continues to oscillate between 3300 and 3200, showing signs of an attempt to break above 3,300.
Crude prices recover after China cut rates by 25bps. While the respective support levels hold, Brent can rise towards $75-76 and WTI can rise towards $70-72 in the near term. Gold and Silver retain bullishness and can target 2800 and 35 respectively on the higher side. Copper has dipped but near-term looks ranged between 4.55-4 30/25. Natural Gas can rise towards 2.4-2.5 while above 2.3.
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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.
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