Dollar Index is headed towards 104 while Euro has fallen below 1.09 and could now head towards 1.08. Pound trades within 1.26-1.28 while Aussie has broken below support at 0.64 and could be vulnerable to a fall to 0.63. USDJPY and EURJPY are slowly moving higher towards 148 and 160 respectively. USDCNY is bullish towards 7.35/40 in the coming weeks. USDRUB fell sharply and could head towards 92.50 while falling sharply from 102.50. EURINR has broken below 90.50 and has scope to fall towards lower support near 89.50. USDINR may open with a gap up today above 83 and could test 83.20/25. Need to see if the pair can continue to move up thereafter.

Dollar Index (103.551) is headed towards resistance at 104 from where a reversal is expected. Failure to fall from 104 would be very surprising and would then force us to revise our medium-term forecasts. For now watch price action near 104.

EURUSD (1.0866) has broken below support at 1.09 and is headed towards 1.0850-1.08 on the downside which can be tested before a reversal is seen in the medium term. View is bearish while below 1.09.

EURJPY (159.10) has moved up well while above support at 158. The pair could rise slowly towards 160-162.

Dollar-Yen (146.40) is rising slowly towards 148. View is bullish for the near term.

USDCNY (7.2979) is moving up slowly. A break above 7.30 will quicken its pace for rise towards 7.35/40.

Pound (1.2718) continues to fluctuate within 1.26-1.28 region and needs a clear break out on either side for indication of further direction.

Aussie (0.6381) has broken below our expected support at 0.64 and if it does not bounce back above 0.64 immediately, it could be further bearish towards 0.63/62 soon. View is bearish below 0.64.

USDRUB (94.5959) seems to be falling sharply from 102.50 with a possible immediate downside of 92.50. A break below 92.50 if seen can be bearish for the pair towards 90 or lower. For now, upside could be capped at 102.50.

USDINR (82.9550) tested 83.0725 on Monday before closing below 83 on the OTC markets. The NDF rate has come down sharply from 82.39/40 seen yesterday to current levels of 83.1940. However, the spot is likely to open with a gap up today and has fair scope to test 82.20/25 but it has to be seen if it can move further up towards 83.40/50 or would come off in a few sessions back to levels below 83.

EURINR (90.4376) has broken below support at 90.50 and could soon be headed towards 90-89.50. Note that 89.50 is a lower and crucial support which could produce a bounce by the end of this month.

The US Treasury yields have surged. The minutes of the Fed’s July meeting indicating the need for more rise, took yields higher. The outlook is bullish, and the yields can rise more. The German yields have dipped. The downside could be limited, and the broader trend remains up. The 10Yr and 5Yr GoI have supports to limit the downside and keep the broader bullish to rise more.

The US 10Yr (4.28%) and the 30Yr (4.37%) yields are heading up towards 4.3%-4.35% and 4.4% in line with our expectation. The upside can extend even up to 4.4%-4.5% (10Yr) and 4.5%-4.6% (30Yr).

The German 10Yr (2.64%) and the 30Yr (2.72%) yields have dipped slightly. The view remains bullish to see a rise to 3%-3.1% on both the 10Yr and 30Yr with intermediate corrections.

The 10Yr GoI (7.2034%) and 5Yr GOI (7.1882%) yields have support at 7.18%-7.14% and 7.1% (respectively. Outlook is bullish to see 7.35% (10Yr) and 7.45% (5Yr) over the medium-term.

Dow is coming down towards its immediate support at 34700. Need to see if it bounces back from 34700 or not. DAX is attempting to bounce back but it would remain vulnerable while below the resistance at 16000-16100. Nifty has risen further but needs to surpass 19600 to negate the danger of falling again. Nikkei and Shanghai remains bearish.

Dow (34765.74, -0.52%) is coming down towards 34700 as expected. Failure to bounce back from 34700 can drag it down to 34500 and even lower.

DAX (15789.45, +0.14%) is attempting to bounce. But while below the 16000-16100 resistance, the view is bearish to see 15500-15400.

Nifty (19465, +0.16%) has risen contrary to our expectation to fall below 19300. But a strong rise past 19600 is necessarily needed to completely negate the chances of breaking 19300 and testing 19000 on the downside. It is a wait and watch.

Nikkei (31328.25, -1.38%) has broken below the support at 31500. While below 31500, a further dip towards 30500 can be seen.

Shanghai (3141.46, -0.27%) continues to fall. View remains bearish for a test of 3100 before a pause can be seen. Failure to bounce back from 3100 can drag it further down to 3050.

Brent and WTI have broken below their immediate support and look bearish to fall further in the near term. Gold, Silver and Copper have scope to test 1900, 22 and 3.55 on the downside. Natural gas has to hold above 2.55-2.50 to avoid coming down further to 2.4.

Brent ($ 83.45) has fallen below $ 84. While the fall sustains, it can come down to $ 82 or even lower to $ 80.

WTI ($ 79.47) has fallen sharply below $ 80. While below $ 80, a further dip toward $ 77 can be seen.

Gold (1922.10) continues to fall as the resistance at 1940 has held well. It may come down to 1900 before a bounce back can happen.

Silver (22.50) remains lower. It has scope to test key support at 22 before a bounce back towards 23-23.50 can be seen.

Copper (3.6435) has declined, breaking below the support at 3.65. It looks likely to fall further to 3.55 from here.

Natural Gas (2.6030) has come down to 2.6 as expected. Immediate support is at 2.55-2.5. Failure to hold above 2.5 can see an extended fall to 2.4.

1:30 7:00 Australia Labour Force
Expn – …Expected 15.2K …Previous 32.6K

9:00 14:30 EU Trade Bal
Expn – …Expected 2.3 …Previous -0.9

12:30 18:00 US Philifed Index
Expn – …Expected -9.8 …Previous -13.5

DATA YESTERDAY:
—————–
7:00 12:30 UK CPI Y/Y
Expn 8.5% …Expected 6.8% …Previous 8.0% …Actual 6.9%

9:00 14:30 EU GDP
Expn – …Expected 0.3% …Previous 0.3% …Actual 0.3%

9:00 14:30 EU Ind Prodn (MoM)
Expn 1.5% …Expected 0.1% …Previous 0.0% …Actual 0.5%

12:30 18:00 US Housing Starts
Expn 1674K …Expected 1450K …Previous 1398K …Actual 1452K

13:15 18:45 US Industrial Production
Expn 0.1% …Expected 0.3% …Previous -0.8% …Actual 1.0%

13:15 18:45 US Capacity Utilization
Expn 78.7% …Expected 79.1% …Previous 78.6% …Actual 79.3%