Kshitij Consultancy Services Team
Kshitij Consultancy Services
Lower US NFP data on Friday led to Dollar weakness below 105 and Euro strength above 1.08. However, both could limit its near-term move to 104.50 and 1.0850/09 respectively. Dollar-Yen and EURJPY have dipped as expected but could soon bounce back from 160 and 173. Aussie & Pound have risen well and could test 0.68 and 1.2850 respectively. USDCNY is likely to continue trade within 7.26-7.28. EURINR has risen and could limit its upside to 91 from where a dip to 89.50-89 could be possible in the medium term. USDINR can continue to trade within its range of 83.30-83.67 in the near term. A dip to 83.40/30 can be possible today on a stronger Euro.
The US Treasury yields have declined sharply on Friday after the US Unemployment data release. The Unemployment rate rose to 4.1% in June. The Treasury yields can fall further in the coming days. The German yields have also declined. But the broader view remains bullish, and the yields can rise back to keep the overall uptrend intact. The 10Yr and 5Yr GoI are struggling to gain strength and rise. But as long as they sustain above their support the bias is positive to see a rise going forward. It is a wait-and-watch situation now.
Most of the equities look bullish for the near term except for Shanghai. Dow Jones is still stuck in a narrow zone but has scope to see an eventual breakout on the upside. Shanghai looks bearish towards 2900. Need to see if it falls further below 2900 or not.
Crude prices have fallen back whereas Gold, Silver, and Copper have risen sharply followed by the release of lower US Non-farm payroll data and High unemployment data which has increased the FED rate cut expectations this year. Crude prices have near-term supports that could stall the current fall and produce a bounce toward their key resistance. Metals have scope to target further upside in the near term. Natural Gas has recovered a bit but bias is still tilted towards bearishness.
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
EUR/USD recovers toward 1.0850 amid risk reset
EUR/USD is attempting a bounce toward 1.0850 in the European session on Monday, as traders ignore France's election gridlock, lifting risk sentiment. Risk reset checks the renewed US Dollar upside. EU Sentix data is next in focus.
GBP/USD steadies above 1.2800 as US Dollar struggles
GBP/USD keeps its range above 1.2800 in European trading on Monday. The US Dollar recovery stalls and offers some comfort to the pair. Traders, however, remain wary after the UK elections and ahead of Powell's testimony and US CPI data due later this week.
Gold price edges lower as PBoC keeps Gold buying on hold
Gold price attracts some sellers below the $2,400 barrier on Monday. Yellow metal loses traction as China's Central Bank has stopped buying for the second month in June.
Bitcoin falls below $55,000 level
Bitcoin dropped below $56,552 on Sunday, disrupting market structure and signaling a bearish outlook. Ethereum and Ripple also revisited their support levels, slipping below critical thresholds.
The week ahead: Earnings season and US CPI in focus
Financial markets will be digesting political news at the start of this week. Key economic highlights this week include the US CPI for June, which is expected to decline to 3.1% on an annual basis, down from 3.3% in May.