Market Morning Briefing: Sharp Rise In Dollar-Yen Above 109.70
Good gains overnight by the US Dollar (Dollar Index 93.82) after a stronger than expected US Retail Sales (+0.6%, against expectation of +0.4%) and a comment by Bill Dudley of the New York Fed that he favours one more rate hike. Still, be careful of important Resistance in the 94.00-94.50 region.
The Euro (1.1740) may well dip to 1.1640 over this week or the next. Unless there is a strong bounce from that level, there could be danger of deeper decline towards 1.1540 or lower.
Sharp rise in Dollar-Yen (110.67) above 109.70 which seems to be breaking out of the near-term downtrend that was in place from 114.50 (mid-July). As hinted on Monday, maybe we have to give more time to a sideways trend in Dollar-Yen.
The Euro-Yen (129.86) has done well to remain above the crucial Support at 128. As mentioned earlier, a fresh rise past 130 could rekindle the “Risk-ON” trade.
Need to watch the Pound (1.2863) carefully here as it trades below the 1.29 support mentioned on Monday, but on a trendline Support coming up from the low of 1.2106 (14th March). A bounce from here is possibly more likely than a break of Support.
Gold (1279) is struggling to rise above the 1300 regions and only a break above that may open up the higher targets of 1327. Crucial supports are poised at 1258 and 1230 levels. In case the Support at 1230 breaks, there will be a further dip to 1210 and 1188 levels respectively.
Silver (16.66) stands comparatively strong due to the recent strength in copper prices. Immediate resistance poised at 17.10 and 17.50 levels. Only a close below 16.60 could open up 16.05 and 15.80 levels respectively. We might see significant fall in Silver if there will be any short term price correction in Copper towards sub 2.85 levels.
Muted price action has been seen in Copper (2.88). Midterm resistance comes at 3.12 regions and support is at 2.85 levels. We will remain bullish on copper while it is trading above 2.85 regions.But a daily close below 2.85 could open up 2.78 and 2.67 levels respectively.
Brent (51.05) and WTI (47.74) are trading within the ranges of 49.50-53 and 47-50 respectively. We will remain bullish on Brent and WTI, while they are trading above 49 and 47 levels on a weekly closing basis.Today we have U.S crude oil inventory at 8:00 pm with an expectation of -3.0 MB.