Saturday, April 21, 2018
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Market Morning Briefing: Dollar Yen Saw Highs Near 107.46
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FOREX

Dollar index (90.186) hasn’t been able to rise past Thursday’s high of 90.59. There is immediate resistance near 90.50-90.75 as seen on 3 day candles and daily line chart. While below this resistance, the Dollar Index could dip towards 89.5 (seen as support on weekly line chart).

Euro (1.2274) tested lower support on daily candles (near 1.2225) both on Thursday and Friday by dropping to lows near 1.2218-1.2215 and now seems to be bouncing from those levels. The 21 days moving average line is near 1.2319 and could provide some interim resistance in the day ahead. We have been saying that a break below 1.215 would imply medium term bearishness and a breach above 1.25-1.26 would imply medium term bullishness. While between these levels, Euro could continue its ranging of the past 2 months.

Dollar Yen (106.94) saw highs near 107.46 last week and is trading below 107 currently. There could be some support provided by earlier resistance trendline on daily candles and daily line chart near 106.8. If it stays above this level and then moves beyond its previous high of 107.9 (seen in Feb end), it could imply medium term bullishness for Dollar Yen.

Euro Yen (131.25) is trading around resistance in the downward channel on 3 day and weekly candles near 131.0-131.5. If it respects these resistances, it could come down towards support near 130. However, if the Euro moves up towards 1.232 this week and the Dollar Yen stays above 106.80, Euro Yen might well rise past this resistance.

Pound (1.4095) as per our expectation touched levels near 1.396 (very close to support on daily and 3 day candles) and now seems to be bouncing from there. Immediate upside target would be 1.42 (seen as resistance on daily and 3 day candles).

Dollar Rupee (64.97) has been ranged in the last week. We still hope to see dip below 64.90. The Indo-US Yield Spread might bounce and aid Rupee strength.

 

INTEREST RATES

US long term yields as per expectation are seeing a slight dip from resistances in respective downward channel. The US CPI data release this week (11th April) could be important for yields. We have been saying that US yields could continue moving in a downward channel through Apr-May.

US 10 Yr Yield (2.79%), 30 Yr (3.03%), 5 Yr (2.60%), 2 Yr (2.28%) :

The 10 Year almost tested resistance in the downward channel on short term chart by reaching levels near 2.83% but has subsequently dipped from there and could move lower towards earlier low near 2.74%.

The 30 yr yield as expected has also dipped after testing channel resistance near 3.07% and could dip towards 3% this week.

COMMODITIES

Brent (67.36) is likely to come down to 66 from where it may get some support to bounce back towards 69 again. While Nymex WTI (62.25) is testing support at current levels. If support at 62 holds on WTI, it could move up in the next few sessions to 64-65 again.

Gold (1336.70) continues to trade in the consolidation mode between 1360-1310 with a narrower range of 1350-1320 for the next 2-sessions. No clarity is direction is visible just now while the commodity price trades within the mentioned range.

Copper (3.0475) looks bearish towards 3.0-2.95 on the daily line chart. A fall back towards 3 or lower is expected in the near term.

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