Morning briefing: Euro is attempts to rise back within the 1.0450-1.0600 range

The Dollar Index initially slipped to the low of 106.09 but recovered from there. It looks bullish towards 107-108 in the near term while above 105.50. Euro and EURINR are attempting to rise back within their narrow range of 1.0450-1.06 and 88.50-89.50 respectively. Aussie and Pound can remain ranged within 0.6550-0.6400 and 1.2450-1.2750 until a decisive break can be seen on either side. USDCNY has been coming off but while above 7.25, we are retaining our view of seeing a rise towards 7.30-7.35 in the near term. USDJPY needs to sustain above 150 to head towards 152-154 in the coming sessions. EURJPY has risen well from the support of 156 and can extend the rise to 160-162 in the near term. USDINR is rising in line with our view and can soon test 84.83 in the coming sessions. Thereafter, while the resistance holds at 84.83, it can fall back towards 84.60 in the near term.

The US Treasury yields have dipped and seem to be struggling to rise. Supports are there while above which the chances are high to see a rise. But if a break below the supports will drag the yields down further and then a rise can be seen. The US NFP and the unemployment data release tomorrow will need a very close watch. The German yields remain lower and stable. They have to sustain above their immediate support in order to avoid a deeper fall. We will have to wait and watch. The Indian 10Yr GoI continues to fall in line with our expectation. There is room to fall further before a reversal is seen. The RBI’s monetary policy meeting outcome tomorrow is important to watch.

The Dow Jones surpassed 45000, following remarks from Fed Chair Powell, highlighting the strength of the U.S. economy, suggesting that the FOMC could adopt a more cautious approach to lowering interest rates, also noted that economic growth has outperformed expectations since September. If the index sustains above 45,000, it may test the immediate resistance at 45500. The DAX continues its upward momentum and can target 20500-21000 before pausing. Nifty attempted to breach the 24600 mark but failed, closing the session flat. Nikkei maintained levels above 39000 and is trading near the resistance at 39500. Sustained trading above this threshold could drive the index higher towards 40000–41000. The Shanghai Composite remains below the resistance at 3080. If this level holds, the index could decline towards 3300–3250.

Crude prices have fallen and can dip further towards 71.5/71.0 (Brent) and 67 (WTI) in the near term. Gold remains ranged between 2650-2700. Silver and Natural Gas can rise towards 32.5-33.0 and 3.4-3.6 respectively. Copper can fall towards 4.15-4.10 while below 4.2.

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