(Vikram Murarka – Kshitij Consultancy Services)
Sharp volatility seen in the currencies on Friday from where the prices have recovered a bit today.
But overall with weak US Dollar, other currencies trade stronger and has some scope for continuing its rise against the Dollar in the near term. While Dollar Index has fallen and can test 105-104.60, Euro, Aussie, Pound can have scope to test 1.03/04, 0.71 and 1.23/24 while USDCNY remains within 6.72/77 and Dollar Rupee can test 79.00 before a sharp bounce back towards 79.30/40 is seen. USDJPY has been falling along with the Dollar Index and looks bearish towards 130 that can lead to some bearishness in EURJPY as well towards 135/134. USDRUB can rise to 65-70 while above 61.
The US Treasury yields continue to trade lower and remain weak to dip further and test their key supports.
We expect the supports to hold and produce a bounce. The German yields remain weak and keep intact our bearish view. They can fall further from here. The Indian 10Yr GoI has tested its key support and bounced. Need to see if this bounce sustains or not. But the 5Yr GoI still has room on the downside to fall before a strong reversal is seen.
Dow made a high of 32910 on Friday before coming off slightly from there.
Bullish bias remains intact for a possible break above 33000 while Dax has risen above 13400 and can rise further towards 14000-14200. Nikkei has scope to rise towards 28500 while Nifty too has been decently bullish last week which if continues can take it higher towards 17500-17700 in the coming 1-2 weeks. Shanghai is stuck within 3300-3200 and needs a decisive break on either side to give more clarity on medium term direction.
Brent and WTI have declined after testing a high of 106.50 and 101.90 respectively.
While the fall sustains, a further dip to downside looks possible. Gold needs a strong break above 1780 to rise further in the near term. Silver and Copper have declined from 20.5 and 3.6 respectively. Only a rise past above the mentioned levels would lead to continuing its bullish momentum in the coming sessions.
Read Markets assume this will end up with a Fed tightening less than it currently foresees
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