Dollar Index has dipped below 106 but has to face 105.50 yet from where a bounce could still be possible. Euro is above 1.06 and needs to sustain to slowly move higher towards 1.0650+. Aussie and Pound may test resistance near 0.6450 and 1.23-1.2350 respectively. It would be important to see if the levels would hold or break. EURJPY is again rising back towards 158 and could fall to 157-156 if a rejection is seen. USDJPY has support at 148 which if holds can take it towards 150. USDRUB may trade within 95-102.50. EURINR could dip towards 88 or lower while below 88.50. USDINR needs to break higher or decline from 83.30 to indicate further movement from here.

Dollar Index (105.736) has fallen below 106 and needs further decline below 105.50 to head lower towards 104 in the medium term. The fall has come in after markets felt a possible shift to dovish stance by FED officials.

EURUSD (1.0608) has risen above 1.06 as expected and has scope to rise towards 1.0650 before turning down again towards 1.06-1.0550 in the medium term.

EURJPY (157.74) has been fluctuating within 156-158 region and has been unable to break on either side of the range. Unless 158 breaks on the upside, it will be difficult for the pair to move up towards 159-160. For now watch price action near 158.

Dollar-Yen (148.69) holds above support at 148 but seems that it can soon break lower to head towards 147-146. The bond buying by BOJ last week seems to keep the USDJPY low for now along with a weaker Dollar Index.

USDCNY (7.2933) is trying to rise while above 7.27 but needs a sustained break above 7.30 to move up else could trade within a broad sideways range of 7.27/25-7.30.

Aussie (0.6426) has tested crucial resistance at 0.6450 and dipped slightly from there. It would be crucial to watch if the Aussie would break higher or decline towards 0.64. With the Dollar Index weakening, there could be scope for a rise in Aussie towards 0.65 in case it manages to break above 0.6450; else can fall back towards 0.6350.

Pound (1.2296) has resistance near 1.23-1.2350 which could possibly hold in the near term and produce a fall back towards 1.22 soon.

USDRUB (99.28) fell to 95.51 before bouncing back to current levels again. Broad range of 95-102.55 may hold for the rest of the week with high volatility in place.

USDINR (83.25) has been trading in a very narrow range of 83.15-83.28 over the past 6-sessions. While below 83.30, there is scope for a fall to 83.00 but if it breaks above 83.30, it can rally towards 83.50 and higher eventually.

EURINR (88.2457) has declined from levels below 88.50 and has scope to fall towards 88 or lower soon.

The US Treasury and the German yields remain lower as the sentiment remains risk-averse on the back of the geopolitical tensions. A break below the immediate resistances can drag the Treasury yields lower. The US inflation data release tomorrow will be important to watch. The German yields can also fall more from here before reversing higher again. The 10Yr and 5Yr GoI have come down. The resistances are holding well as expected and the yields have room to fall more from here.

The US 10Yr (4.64%) and the 30Yr (4.82%) yields remain lower. A fall below 4.6% (10Yr) and 4.8% (30Yr) can drag them to 4.5%-4.4% (10Yr) and 4.7%-4.6% (30Yr). That will negate the rise to 5% (10Yr) and 5.2% (30Yr) for now.

The German 10Yr (2.77%) and the 30Yr (3%) remain stable. While below 2.8% (10Yr) and 3.1% (30Yr), a further fall to 2.6% (10Yr) and 2.8% (30Yr) is possible. Thereafter a fresh rise can be seen. The expected rise to 3.1% (10Yr) and 3.3%-3.4% (30Yr) will get delayed now.

The 10Yr GoI (7.3471%) and the 5Yr GOI (7.3903%) have come down sharply. The resistances at 7.4% (10Yr) and 7.45% (5Yr) are holding well as expected. 7.3% (10Yr) and 7.35% (5Yr) can be tested now. The price action thereafter will need a close watch.

Dow Jones and DAX needs to rise past 33900 and 15450 to avoid a fall back. Nifty has risen well above 19600 but needs a further break above 19800 to strengthen the momentum. Nikkei remain bullish. Shanghai looks mixed.

Dow (33739.30, +0.40%) tested 33900 and has come down from there. A strong break above 33900 can take it up to 34000-34300 and avoid a fall back to 33500-33300.

DAX (15423.52, +1.95%) has risen sharply contrary to our expectation. A rise above 15450 can take it up to 15650-15700 and will reduce the danger of falling to 14800.

Nifty (19689.85, +0.91%) has made a strong close above 19600 and can now test 19800. A break above 19800 can take it up to 20000 again. Else, a range of 19400-19800 is a possibility for some time.

Nikkei (31924.50, +0.51%) has risen well above the resistance at 31700. View is bullish for a rise towards 32500. On the downside, support is at 31500.

Shanghai (3091.95, -0.36%) outlook remains mixed. A sideways range of 3050-3150 is likely to persist for some time.

Crude prices looks range bound within $ 89-86 (Brent) and $ 88-84 (WTI) respectively. Gold and Silver lacks strength but bias remains bullish to see a test of their immediate resistance. Copper and Natural gas may remain range bound within 3.70-3.55 and 3.3-3.5 respectively for some time.

Brent ($ 87.99) is consolidating below $ 89. It may remain ranged within $ 89-86 for a while before a break on either side of the range is seen.

WTI ($ 86.21) is consolidating within $ 88-84. A decisive break on either side of the range will decide if it will rise towards $ 90-92 or fall towards $ 82-80.

Gold (1874.80) is poised below 1880 but bias remains bullish for a rise towards 1900. Thereafter we have to see if it falls back or breaks higher above 1900.

Silver (22.02) remains stable around 22 and lacks a strong follow through rise. A test of 22.50-23 is still possible before a reversal can happen.

Copper (3.6415) has declined from yesterday’s high of 3.6745. While below 3.70, a range of 3.70-3.55 could hold for some time.

Natural Gas (3.4290) has risen back as the support at 3.30 is holding well. 3.3-3.5 range may hold for a while. A break above 3.5, if seen, can be further bullish towards 4.

12:30 18:00 US PPI
Expn 0.0% …Expected 0.3% …Previous 0.7%

12:30 18:00 US PPI ex Food & Energy (MoM)
Expn 0.4 …Expected 0.2 …Previous 0.2

DATA YESTERDAY:

No major data release yesterday.