Most currency pairs trade near crucial supports/resistances and a breach or hold of these levels are important to watch for the near term to decide on further direction from here. Dollar Index is holding below crucial resistance at 106 while Euro is trading above support near 1.06-1.0650 but there needs clarity on whether the respective levels would continue to hold or breach in the coming weeks. EURJPY has support at 157 while USDJPY has support near 147/146. USDCNY must break above 7.30 to rise further towards 7.35/38 in the medium term. Aussie is holding above 0.6390 and can trade within 0.6390-0.65 while Pound has fallen below 1.23 after the BOE kept rates unchanged. A fall to 1.22 looks possible now. USDRUB can trade within 94-98 range. EURINR can test support at 88 from where a bounce is expected. Else can open lower targets of 87.50-87.00. USDINR closed near 83.09 yesterday but on news of inclusion of Indian Government bonds in the JP Morgan GBI-Em index, Rupee has appreciated in the NDF markets (currently quoting 82.7330). The pair may open with a gap down on the OTC markets but it has to be seen if the fall in would sustain in the medium term.
Dollar Index (105.524) continues to head towards 106 and needs a sharp rejection to fall to 104.50-104. On the other hand, EURUSD (1.0648) has scope to fall to 1.06 but could continue trade within 1.06-1.07 for sometime.
EURJPY (157.65) seems to be holding above immediate support near 157 and if the rise sustains, a target of 159 can be possible soon.
Dollar-Yen (148.02) can fall to 147/146 if it falls below 148. Else while above 148, a possible rise to 149/150 cannot be negated.
USDCNY (7.2993) can test 7.2870 on the downside but has to eventually break above 7.30/32 to head towards 7.35/38.
Aussie (0.6416) seems to be holding above 0.6390 after seeing a sharp fall over the last 2-sessions. Range of 0.6390-0.65 may hold for some more time.
Pound (1.2278) faced fresh selling pressure after the BOE kept rates unchanged. View is bearish while below 1.23.
USDRUB (95.08) faced rejection from 96.4269 and could come off sharply towards 94. Overall broad 94-98 region may continue to hold.
USDINR (83.0950) closed near 83.10 yesterday and could not fall below 83 on the OTC market. But the pair has seen a sharp fall in the NDF markets (82.7330) in today’s early Asian hours on news of inclusion of Indian Government bonds in the JP Morgan Global Diversified Index (GBI-EM) starting June 28th 2024. The bonds are to be staggered over a 10-mnth period starting June 28th 2024 through March 31st 2025 with an inclusion of 1% weight per month. (News Source: JP Morgan Global Index Research dated 21-Sep-23). It may open with a gap down near 82.80/70 but it has to be seen if the fall would sustain in the medium term.
EURINR (88.1569) is heading towards 88 and if it breaks lower, near term could turn bearish towards 87 or lower. Watch price action near 88.
The US Treasury yields have surged further and are coming closer to our expected levels much faster. There is a possibility of seeing a correction after some more rise from current levels. So, wait and watch. The German yields have bounced back after a short dip. The outlook remains bullish, and the yields can rise more. The 10Yr and 5Yr GoI remain volatile within their current range.
The US 10Yr (4.5%) and the 30Yr (4.59%) yields have surged towards 4.5% and 4.6% much faster than expected. 4.6% (10Yr), 4.7% (30Yr) can be tested after which a correction is possible.
The German 10Yr (2.73%) and the 30Yr (2.86%) yields have risen back and are keeping the broader uptrend intact. A rise to 3%-3.1% is on the cards. Support is at 2.5% (10Yr) and 2.6% (30Yr).
The 10Yr GoI (7.1655%) and the 5Yr GOI (7.1570%) remains volatile within the expected 7.1%-7.25% range. The bias is positive to see an upside breakout above 7.25% and a rise to 7.35% (10Yr) and 7.3% and 7.45% (5Yr) eventually.
Dow Jones and Nifty looks bearish. DAX has declined sharply towards the lower end of the 15500-16100 range. We need to see if it bounces back from 15500 or breaks lower. Nikkei has bounced back from its intra day low and may rise towards 33000. Shanghai has rebounded but has to overcome its immediate hurdle at 3115-3125 to reduce the downside pressure.
Dow (34070.42, -1.08%) has declined below 34200 and can test 33800-33700 on the downside now. Thereafter a fresh rise is possible.
DAX (15571.86, -1.33%) has declined sharply and is poised at the lower end of its 15500-16100 range. Need to see if it is bouncing back or extending the fall to 15400 and lower.
Nifty (19742.35, -0.8%) has closed just below 19750 and looks likely to extend the fall upto 19500 before a reversal is seen. In case 19500 is also broken, the fall can extend up to 19200-19000. But for now, we may give less probability for that.
Nikkei (32395, -0.67%) fell to a low of 32155 well below our expected level of 32500-32300 and is bouncing back from there. If the bounce sustains, it may rise towards 33000.
Shanghai (3096.31, -0.38%) has rebounded from a low of 3079. It has to surpass the resistance at 3115-3125 to reduce the downside pressure. Else a fall towards 3050 is still possible.
Brent and WTI have rebounded but need to rise past $ 95 and $ 92 respectively to negate the danger of falling again. Gold is likely to trade within 1965-1920 for some time. Silver looks bullish while above the support at 23. Copper has to sustain above 3.65 to avoid the danger of falling deeper from here. Natural gas is likely to remain above the support at 2.6/2.5.
Brent ($ 93.81) has bounced back from a low of $ 92.90 but while it remains below $ 95, a fall towards $ 91-90 cannot be negated.
WTI ($ 90.27) has risen back from a low of $ 88.38. It has to rise past $ 92 to reduce the danger of falling towards $ 86.
Gold (1944.50) tested a low of 1933.10 in line with our expectations for a fall towards 1940-1935 and has bounced back from there. A narrow range of 1960-1935 and a broad range of 1965-1920 could persist for some time.
Silver (23.78) fell to 23.06 yesterday in line with our expectations for a fall towards 23 and has risen back from there. There is scope to for a break above 24 and rise towards 24.50 while above 23.
Copper (3.7130) fell sharply to a low of 3.6340 yesterday before bouncing back from there. It has to sustain above 3.65 to avoid the danger of falling deeper towards 3.58-3.55 and to rise towards 3.75.
Natural Gas (2.6330) has managed to hold above the support at 2.6 for now. As long as it holds above 2.6-2.5, our bullish bias will remain intact for a rise towards 2.88-3.0. Overall a range of 3.0-2.5 could persist over the medium term.
23:05 4:35 UK Cons Conf
Expn -21 …Expected -26 …Previous -25
23:30 5:00 JP CPI
Expn 3.3 …Expected – …Previous 3.3
3:00 8:30 BOJ Meeting
Expn – …Expected -0.10% …Previous -0.10%
8:30 14:00 SNB Mtg
Expn – …Expected 2.00% …Previous 1.75% …Actual 1.75%
11:00 16:30 BOE Mtg
Expn – …Expected 5.50% …Previous 5.25% …Actual 5.25%
11:00 16:30 UK BOE Minutes
Expn – …Expected 8-0-1 …Previous 8-0-1 …Actual 4-0-5
12:30 18:00 US Philifed Index
Expn – …Expected -0.4 …Previous 12.0 …Actual – 13.5
12:30 18:00 US Current Account Balance
Expn -201 …Expected -220 …Previous -214.5 …Actual -212.1
14:00 19:30 US Existing Home Sales
Expn 3891K …Expected 4100K …Previous 4070K