Morning briefing: Euro needs to sustain above current levels to test 1.0800

Good Morning!

The Dollar Index looks stable within its range of 106.50-105.50/105, while the Euro needs to sustain above current levels to test 1.08. EURJPY and USDJPY have moved up sharply, above our mentioned targets of 168 and 158 respectively. Price action around current levels would be important to watch as to whether they would rise further or not. Aussie and Pound have the potential to rise towards 0.66 and 1.2550/1.26. USDCNY might trade within 7.24-7.25 for a while. EURINR may remain ranged within 88.50-89.50/90 region. USDINR can remain below 83.40 and trade within 83.40-83.20 for a while before eventually breaking higher towards 83.50-83.60 in the coming weeks.

The US Treasury yields have come down slightly but supports are there to limit the downside and keep the upside open for more rise. The German yields have come down sharply. But the broader trend is up and the downside could be limited. We can expect the yields to rise back and move higher in the coming days. The 10Yr and 5Yr GoI are oscillating in a sideways range. This could just be a consolidation within the overall uptrend.

Dow Jones has bounced above 38000 but is likely to face resistance at 38500. DAX has recovered above 18000 contrary to our bearish view. If it sustains, a further rise towards 18400-18500 can be seen. Nifty fell sharply on Last friday but might get support at current levels or at 22000. Shanghai is attempting to break above the upper end of the sideways range and looks bullish to target further upside.

Crude prices and Precious Metals are likely to trade sideways for a while. Copper remains bullish for the near term. Natural Gas lacks strength but has scope to see an eventual rise while above the support at 1.90-1.80.

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