Morning briefing: Euro surged to 1.1146 before cooling down

The tariffs concerns kept the markets volatile yesterday as well. The Dollar Index extended the fall to 101.26 before recovering from there. While the support near 101 holds, the index can rise higher. Euro surged to the level of 1.1146 before cooling down. Immediate resistance is coming at 1.12, below which a fall to 1.10/09 can happen. EURINR tested the resistance at 95 before coming down. While it holds, a fall back towards 93.50 can be witnessed. USDJPY has deeper support at 144, above which it can attempt to rise back towards 146-148 in the near term. EURJPY and AUDUSD continues to remain volatile within its respective broad ranges of 164-160 and 0.64-0.62. The USDCNY has declined a bit but while above 7.26 it can attempt to rise back to target of 7.30. Pound tested 1.3207 before cooling down. Still while above 1.30/29, the pair has fair chance to head towards 1.35. USDINR is coming off as anticipated and can extend the fall to 85.25-85.00. Watch out for the US NFP, US Unemployment & US Avg Hrly Earnings data releases scheduled today.  

The US Treasury yields have declined further. The bearish view is intact. As mentioned yesterday, the extended fall is more likely to happen going forward. The German yields have come down. They have limited room on the downside to test their support. After this fall the broader uptrend is likely to resume. The 10Yr GoI has inched up, but it is unlikely to sustain. We expect the yield to fall further in the coming days.

The global equity market is welcoming Trump's discounted reciprocal tariff rate negatively. The Dow Jones plummeted by nearly 4%, and a expected fall towards 40000-39000 is happening fast than expectations. Similarly, DAX looks bearish towards 21500-21300. Nifty can come down to 23000-22800 before seeing a rise to 23500 and beyond. Nikkei is heading towards the testing a key support at 33000. Shanghai is closed today. 

Brent and WTI crude have dropped on tariff concerns but could rebound toward $72–$74 and $68–$70 respectively if support levels hold. Gold remains under pressure below $3,200 and may fall toward $3,000, while silver continues its bearish trend with potential to dip to $30. Copper has broken below $4.90 and could slide further to $4.70. Meanwhile, natural gas is showing strength above $4.00, with room to rise toward $4.40 in the near term.

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