Morning briefing: The US Treasury and the German yields sustain higher

Vikram Murarka Kshitij Consultancy Services

The Dollar Index can rise towards 109-109.50 while above 107.50-108.00. Euro, EURINR and Aussie can trade within 1.0450/0550-1.0350/0300, 89.50/90.00-88.00 and 0.6350/06300-0.6200 respectively until a decisive break is seen on either side. The pound looks stable above 1.25 but needs a strong break past 1.26 to rise higher within the 1.25-1.28 range. Else any break below 1.2500-1.2450, if seen, can be bearish. USDJPY is rising as expected and can test 158 soon. Thereafter, whether the rise extends to 160 or falls back to previous levels will have to be seen. EURJPY, on a break past 164 can turn bullish towards 166-167 in the near term. USDINR tested 85.21 on Tuesday as expected and now while it sustains above 85.10, it can extend the ongoing rise to 85.40/50 in the coming weeks.

The US Treasury and the German yields sustain higher. The outlook is bullish for both the yields. More rise is on the cards in the coming days. The 10Yr GoI remains lower. The broader downtrend has resumed, and the yield can fall more from here.

The Dow Jones surged above 43000 and closed just below our mentioned target of 43300. A maximum extension to 43500-44000 is possible before seeing a fall towards 42000-41800. DAX is closed today. Nifty is struggling to rise past 23,900. It can trade within 23500-24100 for the near term. Nikkei sustained above 39,000 and could advance further toward 39,500-40,000. Shanghai remains below 3,400 and may oscillate within the 3,400-3,350 range. A break on either side is required for further directional clarity.

Crude prices and metal prices look to range for the near term. Brent and WTI can trade between 72.5/73-75 and 69-72, while Gold, Silver, Copper can range between 2650-2600, 30.5-29.5/29.0 and 4.05-4.15/4.20 respectively. Natural Gas also looks ranged between 3.4-4.0 while below 4.

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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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