Morning briefing: Euro has risen and could test 1.06 or slightly higher

Good Morning!

Small uptick in US initial jobless claims (204k from earlier 202k), stable US GDP (Q/Q% an Y/Y%) and lower German inflation (4.5% Y/Y% from earlier 6.1%) have led to a softer Dollar Index as Euro has risen and could lead to a test of 105.50 on the index and 1.06 or slightly higher on the Euro before resuming the medium term trend again. Pound, Aussie and EURJPY have risen well but need to continue rising to prevent a fall towards earlier expected levels. USDJPY can move up towards 150-152 before pausing the rally. USDCNY can trade within 7.28-7.32 while Dollar Index trades lower. USDRUB can remain within 94-98 range. EURINR is highly volatile within the 87-88 range. USDINR could come down to 83.00-82.90 while below resistance at 83.30.

The US Treasury yields remain higher and are likely to move up further before a reversal is seen. The US PCE data release will need a close watch to see how it impacts the yields. The German yields continue to move up and are coming closer to our expected level. Need to see if a reversal is happening going forward. The 10Yr and 5Yr have surged within their range. It will have to be seen if the expected upside range breakout is happening now or not.

Dow Jones sustains above 33300 but has to rise past 33800 to reduce the danger of falling again. Nifty has declined sharply yesterday and looks bearish to come down further below 19500. DAX has bounced back as the support at 15150 has held well and is likely to move up further on the upside. Nikkei is bearish while it remains below the resistance at 32500. Shanghai is to remain range bound for the near term.

Brent and WTI have fallen back sharply failing to sustain the rise but the near term support are likely to hold and produce a bounce back from there. Gold remains vulnerable below 1900. Silver has bounced back as the support at 22.50 has held well. Copper has risen back sharply but needs to surpass 3.75/3.76 to target its next resistance. Natural gas has risen sharply towards 3.0. A break above 3.0 can be further bullish towards 3.25.

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