Morning briefing: Euro can have downside limited to 1.1200

The Dollar Index is attempting to rise higher, but the upside looks capped at 101. A confirmed fall below 99 can open the doors for 98-96. The Euro and EURINR can have downside limited to 1.12 and 95 region. Eventually both can ascend towards 1.16-1.18 and 98/99 respectively. EURJPY and USDJPY have risen past the ranges of 160-164 and 140-144 respectively. Now if sustained, can extend it further to 146 and 166 respectively. AUDUSD needs to rise past 0.645 to bring 0.66 into picture. Else, it can continue to trade within 0.645-0.635 range. The USDCNY while trades above 7.26, a rise to 7.28/30 is possible. Pound is coming off and break below 1.32 can drag it lower to 1.30. USDINR tested 84.46 before recovering from there. While above 84.45, we anticipate the spot to rise back towards 84.80 in the near term. Watch out for the US NFP and the Unemployment data releases scheduled today.

The US Treasury yields are bouncing back from their lows. While there is room to move up further, a strong follow-through rise is needed to sustain. Else the yields can fall back. We will have to wait and see. The US Unemployment data release today will be important to watch. The German yields are coming down in line with our expectation. The bearish outlook is intact. The 10Yr GoI is stuck in a narrow range. We will have to wait for the range breakout to get clarity.

Dow needs to see a sustained rise above 41000 else can fall to 39800 or lower. Dax looks bullish and a further rise above 22600 can take it to 23000-23500. Nifty is bullish for a rise towards 24700-25000 on a break above 22400. Nikkei has risen sharply as the BOJ lowered its growth and inflation forecasts yesterday signalling a hawkish stance although it kept the key interest rates unchanged. Immediate resistance is seen at 37000 which needs to hold for a shirt correction else the index can be strongly bullish towards 40000. Shanghai may dip to 3250 before rising back towards 3300 eventually. The index is not looking very strong at the moment.

Crude prices remain under pressure with Brent and WTI both showing bearish momentum, eyeing lower levels unless key resistances break. Gold has unexpectedly dropped below $3,300 and may extend fall towards $3,100, while Silver also weakens below $33, targeting $32. Copper continues its expected downtrend, with further downside potential. Natural Gas faces resistance near $3.50; if it holds, a fall to $3.00 is likely, but a breakout could lead to $4.00.

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