Market Morning Briefing: Weakness In Yen And Aussie Is Being Reflected In Weakness In Chinese Yuan As Well

FOREX

Crucial juncture in most currencies. There is a faint chance that the current Dollar strength could see a correction/ reversal next month. This current faint chance will suddenly become bigger if certain Support/ Resistances hold. For instance Support at 1.14 on Euro and Resistance at 6.8935 on USDCNY.

Dollar Index (95.59) is trading in the 95.5-96.0 resistance zone – a breach of the 13 days MA near 95.98 could take it higher towards 97 (in the coming week) and then, even higher towards 97.5 (maybe in the next to next week). The 97 to 98 zone is a crucial resistance zone, which could lead to a reversal in the medium term.

Euro (1.1553) is trading close to the mentioned Support range of 1.1550-25. A further dip below 1.1500 (if seen), might get us down to 1.1400 which might be a decent medium-term Support.

Dollar Yen (111.40): Has been unable to sustain below 110 and has risen above resistance on daily candles (110.75-111.00). As such, there may now be chances of seeing a rise to 112-113, as we have been suggesting.

Euro Yen (128.70): As mentioned yesterday, Euro Yen’s rise above the 21 days MA indicates that it could stay bullish towards 130 (resistance on daily line chart) – with a test of 130 happening some time in the next week.

Pound (1.2813) : In line with yesterday’s prediction, Pound has indeed moved down from resistance on 3 day candles near 1.294 to 1.28. A fall towards 1.27-1.26 is now likely next week.

Dollar Yuan (6.8861): Weakness in Yen and Aussie is being reflected in weakness in Chinese Yuan (6.8876) as well. Watch Resistance at 6.8935-50 over today-Monday. If that holds, there could be some chances of USDCNY topping out for some time.

COMMODITIES

Nymex WTI (68.21) has resistance at immediate levels and needs to break on the upside to continue rising towards 70. Note above 68.50, resistance is visible near 70.

Brent (75.05) could have resistance at 76 and then at 78 on the upside. Both are decent resistances and may hold in the near term. If 76 holds, we could see a dip back to 74-72 in the medium term.

Gold (1192.70) has some scope of re-testing 1180-1175 in the near term while below 1200. Some stable trade could be seen below 1200 for some more sessions.

Copper (2.65) faced rejection from the immediate resistance on the daily candles and while that holds, Copper could come off towards 2.55-2.50 region in the near term. View looks bearish just now.