DXY Index trading steady at 83.05 levels - ICICI Bank : Treasury Research

The DXY index is trading steady at 83.05 levels, though off the yesterday's highs of 83.23 as the safe haven demand for the greenback has been hurt by the recovery witnessed in risky assets post the rise in US, UK Japan and Eurozone PMI releases in June. The US ISM manufacturing rebounded from a sub-50 reading to hit a 3-month high in June while the employment index showed hiring was weakest in nearly 4 years. The markets await the US factory orders print due later today and the labour market readings due later this week. The investors would also watch for the comments by Fed official Dudley with his speech due later today. Technically, intraday trend for the DXY is bullish with support and resistance at 82.70 and 83.35 respectively.

The Euro is trading weak at 1.3058 levels as against previous close of 1.3063. The currency though rose 0.42% in yesterday's trading session post the release of the composite PMI data that rose to 16-month high level of 48.8 in June along with an increase in peripheral economy PMI numbers as well. The markets now eagerly await the outcome of the ECB policy meeting and Draghi's comments due later this week. The intraday trend for the Euro is bearish, with support and resistance at 1.3000 and 1.3080 respectively.

The British Pound is trading slightly weak at 1.5208 levels as against previous close of 1.5216 tracking the losses in the Euro. The currency however hit an intraday high of 1.5248 yesterday post the release of the PMI release that witnessed a rise to 2-year high levels in the month of June. The currency moves though are likely to be limited ahead of the BoE policy meeting due later this week, the first under the new Governor Carney, with his monetary policy stance to be closely watched. The intra day trend for the GBP/USD cross is bearish, with support and resistance at 1.5160 and 1.5254 respectively.

The Japanese Yen is trading steady at 99.56 levels though near the vicinity of the more than 3-week low of 99.87 it hit in yesterday's trading session. The safe haven demand for the Yen has been affected by the rise in global equities. The currency has lost 6.16% after hitting a high of 93.78 in mid-June with the aggressive monetary policy stance of the Bank of Japan likely to continue to keep it under pressure. Technically, the intra day trend for USD/JPY cross is bullish with support at 99.30 and resistance at 99.80.

USD/CHF is currently trading at 0.9455, little changed from yesterday's close as markets await further cues from a slew of US labour market data releases due this week. Meanwhile, the EURCHF cross is trading around 1.2346, marginally lower than the prior close of 1.2350 after witnessing broad based gains yesterday. Yesterday, the Franc weakened against the Euro as positive economic data from Eurozone aided growth optimism in the region and weighed on the safe haven flows to the Franc. Technically, USD/CHF is expected to trade bullish with support at 0.9430 and resistance at 0.9482.

The Australian Dollar is trading lower around 0.9223 levels as against previous close of 0.9238 ahead of the RBA policy meeting due later in the day as expectations of a rate cut continue to persist in some quarters. Continued concerns over growth momentum in China also weighed on the currency. However, losses were limited amidst rebound in metal prices and firm gains in Australian stocks this morning. Technically, we expect AUD/USD to bearish with support at 0.9195 and resistance at 0.9242.

The Canadian Dollar is trading weaker at 1.0516 compared to yesterday's close of 1.0496 tracking decline in WTI crude oil prices. The currency also remained under pressure as the Dollar remains firm amidst speculation of an early tapering of asset purchases by the Fed. Technically, we expect USD/CAD to trade bullish with support at 1.0480 and resistance at 1.0535.

Source : Equity Bulls

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