Saturday, April 21, 2018
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Market Morning Briefing: Gold Is Stuck In The Narrow 1320-1350
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FOREX

Dollar index (89.89) has dipped further after testing resistance on 3 day and weekly candles near 90.5-90.6 last week. The 13 day and 21 day moving average lines on the daily line chart could provide some interim support near present levels. On break of the moving averages, the next downside targets are seen as support on weekly line chart near 89.5 and lower support near 89.25 on daily candles.

Euro (1.2311), after having bounced from support near 1.2225 on daily candles yesterday, is probably facing some interim resistance from the 21 days moving average line on the daily line chart. A breach of the same would take it towards resistance on daily line chart near 1.245. A decisive breach above 1.25-1.26 would imply medium term bullishness for the Euro. While it stays below 1.25-1.26, it could continue its ranging between 1.215-1.255 of the past 2 months.

Dollar Yen (107.07) as per our expectation yesterday, is getting some support 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 (131.85) as we predicted yesterday has breached resistance in downward channel on 3 day and weekly candles as the Euro has moved up towards 1.232 and the Dollar Yen has stayed above 106.80. If Euro moves further up towards 1.245 and Dollar Yen towards 107.5, it would imply Euro Yen touching 133-134. However, the 21 week moving average line near 133 on the weekly line chart might keep the upside restricted in the short term.

Pound (1.4127) as per our expectation is moving up towards 1.42 (seen as resistance on daily and 3 day candles). If it stays above 1.39-1.40, it could be headed in the medium term towards resistance near 1.46 on the weekly line chart.

Dollar Rupee (65.0225) : Support at 64.80 held yesterday. See chances of 65.20 in 2-3 days.

 

INTEREST RATES

US long term yields have been moving in a downward channel since the Fed rate hike last month. The US CPI data release tomorrow (11th April) could be important for yields – analysts expect some moderation in monthly gain figures; however the year-on-year gain figures could reflect higher inflation (which could be slightly misleading considering last year’s low figures in March).

High year on year figures could take yields higher temporarily but a moderation in monthly gains could mean that yields will continue moving down through Apr-May.

US 10 Yr Yield (2.8046%), 30 Yr (3.016%), 5 Yr (2.623%), 2 Yr (2.2987%) :

The 10 Year instead of dipping lower towards support near 2.74% on the short term chart, has moved up and might test resistance near 2.83%-2.85% in the next 1-2 days.

The 30 yr yield as expected, has dipped further towards 3% after having tested channel resistance near 3.07%.

COMMODITIES

Brent (68.99) tested 67 and has seen a decent bounce from there. If the rise continues, it may head back towards 70-71 levels in the near term. Nymex WTI (63.85) bounced from support as mentioned yesterday. It could move higher towards 65. Near term looks bullish.

Gold (1334.22) is stuck in the narrow 1320-1350 region and is likely to remain stable in the coming sessions too. No major movement expected this week.

Copper (3.099) has risen in the last couple of sessions and is trading just below resistance near 3.10. If 3.10 holds, Copper could come off towards 3.05-3.00 again; else a break above 3.10 could take it higher towards 3.15.

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