Kshitij Consultancy Services
Morning Briefing
Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
22 Apr 24. 0852 IST or 0322 GMT or 2322 EST

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GOOD MORNING!
FOREX

The Dollar Index needs to be sustained above 106 to test 106.5-107 else can get dragged towards 105.5-105. Meanwhile, the Euro could remain ranged within 1.06-1.07 for a while. EURJPY remains volatile within the 165-162 region with a possible attempt to break higher while USDJPY is headed towards 155-156. Aussie and Pound are heading higher towards 0.65 and 1.25 respectively. USDCNY remained flat above 7.24 on Friday and may continue to rise towards 7.25. EURINR is rising towards the upper end of the 88-90 range. In USDINR, we can expect a lower opening below 83.55/50 in onshore markets today with an overall range of 83.55-83.40/35 for the near term.

Dollar Index (106.028) currently looks stable around 106 but it needs to necessarily rise above 106.5 to turn bullish for the medium term. Otherwise, it could get dragged towards 105.5-105 on the downside. An immediate range of 106.50-105.50 may hold for a few sessions.

EURUSD (1.0665) has managed to hold well above 1.06 over the last couple of weeks and now has scope to rise towards 1.07 in the next few sessions. The immediate range of 1.06-1.07 may hold for a while. Thereafter, a break above 1.07 is needed to turn further bullish. While above 1.06, the overall view remains bullish.

EURJPY (164.97) continues to remain volatile within its range of 162-165 and unless a strong break on either side of the range is seen, we expect it to hold for the next few sessions. A break past 165 can take it higher to test another resistance at 166 in the medium term.

Dollar-Yen (154.66) rose from 153.60 itself, contrary to our anticipation of a fall towards 153. It is now headed towards 155-156 from where a medium-term fall towards 152 can be seen.

USDCNY (7.2422) remained flat above 7.24 on Friday, but our overall view remains bullish towards 7.25. Thereafter, only a decisive break past 7.25 can make the outlook further bullish for the medium term.

The support near 0.6350 in Aussie (0.6445) seems to have worked well as Aussie has bounced back well and if sustained, can test 0.65 in the coming sessions.

Pound (1.2383) has bounced from 1.2360 seen on Friday. While the rise continues, a test of 1.24/25 looks possible.

USDINR (83.4750) quoted a low of 83.33 on the NDF after closing Friday’s OTC session at 83.4750. Although the pair may not open near 83.33 today, there is a fair chance that the pair will trade below 83.55/50 to test 83.40.

EURINR (88.9668) is likely to head towards 89.50-90 while above 88.50.

INTEREST RATES

The US Treasury yields have recovered sharply from their lows on Friday. This keeps the positive bias intact and keeps the doors open for more rise in the coming days. The German yields sustain their range breakout. But a strong follow-through rise is needed from here to move higher and avoid falling back into the range again. The 10Yr and 5Yr GoI have risen sharply on Friday. The bullish outlook is intact, and the yields can rise further from here.

The US 10Yr (4.65%) and the 30Yr (4.73%) yields have bounced back sharply from their lows on Friday. The 10Yr can rise to 4.75%-4.8% while it sustains above 4.6%. The 30Yr can test 4.8%. The price action thereafter needs to be watched to see if a reversal is happening or not.

The German 10Yr (2.5%) and the 30Yr (2.62%) yields remain stable. The upside breakout of the 2.2%-2.45% (10Yr) and (2.4%-2.6%) range is intact. But a strong follow-through rise is needed to move up to 2.6% (10Yr) and 2.75%-2.8% (30Yr). Else they can fall back into their range again.

The 10Yr GoI (7.2278%) and 5Yr GOI (7.2312%) have risen sharply on Friday. The bullish view is intact. The 10Yr has risen above 7.2% as expected and can now test 7.3%. The 5Yr can rise to 7.3% and even 7.4%.

STOCKS

Dow Jones and Nikkei have bounced a bit but outlook will remain bearish while below the resistance at 38100 and 38000 respectively. DAX remains bearish for the near term. Strong recovery was seen in Nifty last friday but it has to overcome the resistance ahead to negate the danger of falling towards 21500-21300. Shanghai has scope to break on the upper end of the sideways range and target further upside.

Dow (37986.40, +0.56%) has risen within its 37600-38100 range. While below 38100 the bias is negative to break 37600 and see a fall to 37200-37000.

DAX (17737.36, +0.56%) remains weak while below 18000 for a fall to 17400.

Nifty (22147, +0.69%) fell below 21900 but has risen back sharply from the low of 21778. However, a strong follow-through rise from here and break above 22400-22500 might be needed to become bullish again for 23000. Only then, the danger of the fall to 21500-21300 will get negated completely.

Nikkei (37293.50, +0.55%) has bounced a bit from a low of 36733.06. Immediate resistance is seen at 38000. While that holds, a fall towards 36600-36000 still possible. Thereafter, a bounce back can happen towards 38000-38500.

Shanghai (3071.55, +0.22%) is hovering below 3100. The 3000-3100 range remains intact. Bias is positive to see a break on the upside and rise towards 3150-3200 in the coming days.

COMMODITIES

Crude prices have fallen back sharply. Brent might get some support at $86-85. WTI can fall further while it remains below $83-84. Gold and Silver to trade sideways for a while. Copper continues to rally but might face rejections near 4.58-4.60. Natural Gas to trade sideways within 1.50-2.00 for a while.

Brent ($86.66) has fallen back sharply after testing $90.75 contrary to our view that it may rise towards $92.50-93.00. Support is at $86-85. If that holds, a broad range of $85-90 may hold for a while.

WTI ($81.72) has fallen back sharply after testing $85.61 contrary to our view that it may rise towards $88-90. While the fall sustains below $83-84, it can dip further to $80-78.

Gold (2392.30) has fallen sharply below 2400 after testing 2433.30 on Last friday. It may trade sideways within 2450-2350 for a while before an eventual rise can be seen towards 2500-2520.

Silver (28.42) is stuck within a narrow range of 29-28. It may trade sideways within 29-28/27.50 for while. A breakout on either side of the range will determine if it will rise towards 30 or fall towards 27-26.50.

Copper (4.5375) has risen sharply, breaking above 4.50 contrary to our view that it may hold and produce a fall back. The rise might extend upto 4.58-4.60 and then a corrective dip might be seen towards 4.45-4.40.

Natural Gas (1.7490) has come down a bit after facing rejections from 1.8. A broad sideways range of 1.50-2.00 is expected to hold for the near term. Within this, a rise towards 1.9 looks possible.

DATA TODAY

No major data release today.

Data Friday
............
23:30 05:00 JP CPI
...Kshitij Expn 2.7 ...Expected 2.7 ...Previous 2.8 ...Actual 2.7

DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

WARNING !!
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