Kshitij Consultancy Services
Morning Briefing
Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
29 Sep 22. 0859 IST or 0329 GMT or 2329 EST

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GOOD MORNING!
FOREX

Slight recovery seen compared to movements seen yesterday but we have to wait and watch if the recovery is temporary or will last longer. Dollar Index has come off below 114 taking euro higher but both needs to sustain the movement for the medium term to confirm direction from here. Aussie and Pound have recovered too but unless a rise above 0.66 and 1.10/12 is seen, view remains bearish. EURJPY and USDJPY can rise a bit. USDINR can trade within 82.0-81.40 for the day. USDRUB remains within 56-60 region while USDCNY has fallen below 7.20 which if sustains can drag it lower towards 7.15/10. EURINR is bullish above 77.50-78.

Dollar Index (113.29) has tested 114.778 yesterday before coming off from there. It needs to sustain above 114 to see higher levels of 116-118 else can fall back towards 112/111 or lower eventually. Only a break below 112/111 can give some relief and possibly prevent further upmove in the medium term. Watch price action for the next few sessions.

Euro (0.9679) has managed to move up while 0.95 seems to be holding well for now. A break above 0.98 is needed for further negation of downside. Till then a range of 0.95-0.98 could hold.

EURJPY (139.63) has also manage to rise from 138-137 levels and while above 139, a test of 141-142 cannot be negated. Support at 137 may continue to hold for the medium term.

Pound (1.0788) remains volatile but view is bearish while below 1.10/12. A fall to 1.04 or lower cannot be negated in the medium term unless a sharp rally sets in.

Aussie (0.6470) has managed to rise above 0.64 but needs to break above 0.66 to move up sharply else can be ranged for the near term within 0.66-0.64 region.

Dollar-Yen (144.32) needs to remain below 146/145 to eventually come down towards 142/141 in the medium term. For now, a range of 142-145/146 may hold.

USDCNY (7.1940) has fallen sharply breaking below 7.20. If the fall sustains, the higher targets of 7.30/40 can be negated and instead a fall to 7.10 can be expected. Watch price action for a few sessions to confirm that a near term peak is in place else a rise back in the next few sessions can resume rally.

USDRUB (57.45) can trade within 56-60 in the near term.

USDINR (81.9450) closed at the high yesterday but if 82 holds as a decent resistance just now, a fall to 81.40/25 can be seen in the next few sessions. Overall a possible range of 81.40-82.00 can hold for the day.

EURINR (78.9981) is bullish while above support at 77.50/78.

INTEREST RATES

The Bank of England announcing yesterday that it would start buying long-dated bonds has triggered a sharp fall in the yields all over. But the price action in the next few days will need a close watch to see if the fall in the yields sustains or not. The UK gilt yields have declined sharply across tenors and can fall further if the momentum sustains. The US Treasury yields have declined sharply and will have room to fall further if it fails to bounce from here. The German yields have supports coming up which will have to hold in order to avoid a deeper fall and also to keep the broader uptrend intact. The 10Yr and 5Yr GoI have risen yesterday but looks mixed in the near-term. A corrective fall is possible before a fresh leg of rally happens.

The US 2Yr (4.14%), (5Yr (3.97%), 10Yr (3.75%) and 30Yr (3.7%) Treasury yields have come down sharply across tenors. A further fall from here will increase the chances of seeing 3.5% on the downside in both the 10Yr and 30Yr in the coming days. That in turn will reduce the chances of seeing the rise to 4.2% on the 10Yr and 4.1% on the 30Yr mentioned yesterday.

The German 2Yr (1.80%), 5Yr (2.01%), 10Yr (2.11%) and the 30Yr (2.01%) yields have declined sharply across tenors. 2% on both the 10Yr and 30Yr is a good support which has to be broken to signal a trend reversal and more fall. While above 2%, the broader bullish view will remain intact.

The UK 10Yr (4%) Gilt yield has come down sharply from around 4.5% and will have room to test 3.8%-3.6% while the fall sustains.

The 10Yr (7.3340%) and 5Yr (7.2730%) GoI remained stable after opening with a wide gap-up. Needs to see if this bounce sustains. The 10Yr has to rise past 7.35% to avoid the fall to 7.2%-7.15% mentioned yesterday. The 5Yr on the other hand can consolidate around 7.3% before rising to 7.5%-7.6%.

STOCKS

Dow has rebounded towards 30000 as the support at 28900 seems to be holding well as of now. DAX too has bounced back but could face immediate resistance at 12400. Nikkei has rebounded from a low of 25938.36 seen yesterday but overall outlook remains weak. Shanghai is stuck between 3050-3100 range. Nifty could attempt to rise back above 17000 today following a recovery in the global market.

The support at 28900 is holding for now and the Dow (29683.74, +1.88%) has bounced. However, a sustained rise past 30000 will necessarily be needed to reduce the chances of seeing 28000 on the downside. The price action in the next few sessions will be crucial.

DAX (12183.28, +0.36%) has bounced back sharply from the low of 11862. However, resistance is at 12400 while below which the broader bearish view will remain intact to see a fall to 11000.

Nikkei (26269.00, +0.36%) has rebounded from a low of 25938.36. If the bounce sustains above 26000, a rise back towards 27000 may seems possible. Overall view remains weak. A sustained break below 26000 may lead to a test of 25500-25000 on the downside.

Shanghai (3059.09, +0.46%) continues to trade within the 3050-3100 range. A strong break below 3050 could open doors to 3000-2900 on the downside. However, a break at the upper end of the range, if seen, may see a test of 3125.

Nifty (16858.60, -0.87%) may attempt to rise back above 17000 taking cues from the recovery in the global markets. But 17200-17400 will be important resistances which has to be broken to negate the fall to 16500-16200 completely.

COMMODITIES

Commodities have witnessed a sharp recovery yesterday. Brent and WTI have risen sharply towards the immediate resistance at $90 and $82.50 respectively. Only a strong break above it could see an extended rise on the upside. Gold has surged sharply breaking above the resistance at 1660. Need to see if the bounce sustains or not. Silver and Copper too bounced back sharply from a low of 17.90 and 3.243. However, the broader picture for Gold, Silver and Copper still remains bearish.

Brent ($89.34) has risen back sharply towards the resistance at $90. A strong above the resistance at $90 and $91 is needed to see extended rise towards $95-97.5. But while below $90/91, view is bearish to see a fall towards $80-77.

WTI ($82.24) has risen sharply towards the immediate resistance at $82.50. A break above it could pave the way for $85-87.5 on the upside. But while below $85/87.5 view remains weak to see a fall towards $70.

Gold ($1664) surged to a high of 1671.60 breaking above the immediate resistance at 1660. If the bounce sustains a test of 1700 seems possible before reverting back from there.

Silver (18.78) rose back sharply towards 19 from a low of 17.9 yesterday. Overall outlook remains weak for a fall to 17.00-17.50. For now a range of 18-19 may hold for some time.

Copper (3.3590) bounces back sharply from a low of 3.243 yesterday. If the bounce sustains above 3.2, a test of 3.47 is possible on the upside. A further break above it would lead to an extended rise towards 3.6. However broader outlook remains weak to see a fall towards 3.0-2.9.

DATA TODAY

9:00 14:30 EU Biz Climate
...Kshitij Exp 96.9 ...Expected 95.0 ...Previous 97.6

12:30 18:00 US GDP
...Kshitij Exp - ...Expected -0.6% ...Previous -0.6%

12:30 18:00 CA GDP
...Kshitij Exp - ...Expected -0.1% ...Previous 0.1%

DATA YESTERDAY:-
---------------
No mejor data release yesterday.

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.

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