Morning briefing: Pound heads toward the immediate 1.3650 resistance

The Dollar Index is coming off as anticipated and can test our targets of 97-96 in the near term. The Euro and EURINR need to see a break above 1.18 and 104 to bring the 1.19 and 105 levels into picture. EURJPY and USDJPY can hold the immediate ranges of 172-174 and 149-146 respectively in the near term. USDCNY is coming off and can test 7.11-7.10 if the fall extends further. The Aussie and Pound face are headed towards the immediate resistance coming at 0.67 and 1.3650 respectively. USDINR can trade within the 88.00-88.50 region for some time before heading towards 88.75 later. US Retail sales, Industrial production & Capacity utilisation are some of the important data releases scheduled today.

The US Treasury yields have dipped again. We expect the yields to fall either from here itself or after a short-lived corrective bounce. The US Federal Reserve meeting outcome tomorrow is going to be an important event to watch. The German yields are coming down as expected. They have room to fall more before resuming their broader uptrend. The 10Yr GoI remains unclear. It can continue to oscillate in a sideways range for some time.

The Dow is attempting to move higher with a bullish bias for 47,000–48,000 while holding above 45,500–45,000. The DAX remains rangebound between 23,000-24,500 with chances of a dip towards 23,000. Nifty has slipped slightly but support at 25,000–24,800 is expected to hold, keeping the outlook bullish for 25,250–25,500. Nikkei stays positive and can rise towards 45,000–45,500 in the near term before any reversal. Shanghai, however, is weakening and could fall towards 3,830–3,800 before a possible rebound towards 3,900–4,000.

Brent and WTI remain weak as long as they stay below $68 and $64 respectively, keeping the downside view intact for a fall towards $65–$64 and $60–$58 in the near term. Gold has hit a fresh all-time high and looks poised to rise further towards $3,750–$3,800, while Silver can extend gains towards $43.50–$44. Copper is facing resistance and could reverse lower towards $4.60–$4.55 unless a break above $4.70 opens the way for $4.80–$5.00. Natural Gas is also struggling below resistance near $3.00, and while this holds, a decline towards $2.85–$2.80 remains likely.

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