Sharp movements seen on the currency markets. The Dollar Index has risen above 106.5 while Euro has fallen sharply and could test 1.055-1.05 from where a bounce is needed to prevent further decline to 1.04. EURJPY could trade within 158-160 for a while as USDJPY has risen past 150 and needs to sustain to move up slowly towards 151-152 in the medium term. USDCNY may continue to trade within 7.2950-7.32. A rise past 7.32 is needed for a rise to 7.35 or higher. Pound and Aussie have fallen below 1.21 and 0.63 and look bearish towards 1.20 and 0.62 respectively unless an immediate bounce is seen. USDRUB can fall to 92.50 which needs to produce a bounce else can drag it lower towards 90. USDINR may trade within 82.90/83.00-83.30 region. EURINR can trade within 87/87.50-89.00. Important would be to watch ECB policy meeting today and US GDP data later in the evening after a fairly high German IFO data release yesterday.

Dollar Index (106.54)has moved up, breaking above 106.5 mentioned yesterday. Could it reattempt to test 107? While below 107, we may expect the 107-105 range to hold. A break above 107 if seen can be bullish towards 108 in the longer run.

EURUSD (1.0567) is holding well below 1.0694 seen on Monday. There could be immediate support near 1.0550-1.05 which needs to hold and produce a bounce for Euro to move up towards 1.0650. Else a rise above 107 on the Dollar index could be bearish for Euro below 1.0550.

EURJPY (158.56) continues to trade above support at 158 above which it has fair chances of again rising back towards 159-160. A break below 158, if seen will be strongly bearish towards 156-155 but looks less likely just now.

Dollar-Yen (150.07) rose to 150.318 yesterday but has dipped slightly from there. There is decent chance that the pair can see a sustained rise towards 151-152 over the coming weeks before establishing a top and reversing lower from there.

USDCNY (7.3160) needs to rise past 7.32 to head towards 7.35 and eventually higher. Immediate view is bullish above 7.28.

Aussie (0.6296) has fallen below 0.63 contrary to our expectation of seeing trade within 0.63-0.6450 for sometime. If it does not bounce back immediate above 0.63, we may see a test of 0.62 soon.

Pound (1.21) has come down to support at 1.21 and is threatening to break lower for a fall back towards 1.20 soon. If Pound does not bounce back immediately, it could be bearish for the coming days.

USDRUB (93.315) has fallen sharply and could be headed towards 92.50 initially as mentioned yesterday. There is potential for a further decline towards 90 in the medium term.

USDINR (83.185) is likely to trade within 83.30-83.00/82.90 for the next few days. Unless a break on either side is seen, it could is difficult to project further movement from here. There is lack of clarity on how long the RBI would keep the pair within the narrow consolidative range.

EURINR (87.8335) can fall towards 87.50-87.00 while below 88.20.

The US Treasury yields have risen back sharply. A further rise from here will negate the expected dip and take them higher straight away. The German yields have bounced back and are keeping intact our view of seeing more rise from here. The outcome of the European Central Bank (ECB) meeting today will need a close watch. The 10Yr and 5Yr GoI can fall towards the lower end of their range in the near-term.

The US 10Yr (4.96%) and the 30Yr (5.10%) yields have risen back sharply. A further rise from here will negate the fall to 4.7%-4.6% (10Yr) and 4.8%-4.7% (30Yr) mentioned yesterday and will take them up to 5.1% (10Yr) and 5.2% (30Yr) straight away.

The German 10Yr (2.89%) and the 30Yr (3.11%) yields risen back again and are keeping alive the chances of seeing 3% (10Yr) and 3.2%-3.25% (30Yr).

The 10Yr GoI (7.3408%) has come down to 7.34% as expected and can test 7.3%. The expected range of 7.3%-7.4% remains intact.

The 5Yr GOI (7.3345%) can come down towards the lower end of its 7.3%-7.4%/7.45% range.

Dow Jones and Nikkei have come down again failing to sustain the bounce and may fall further it they fails to sustains above their support at 32850 and 30500 respectively. DAX and Shanghai outlook is mixed. Nifty has come down as expected but failure to get a bounce back from its support can see an extended fall.

Dow (33035.93, -0.32%) has come down again failing to sustain the bounce. It can revisit its support at 32850. A break below it can drag it to 32600.

DAX (14892.18, +0.08%) looks mixed for the near-term within its broad downtrend. It can oscillate between 14500 and 15000 for some time with a bearish bias.

Nifty (19122.15, -0.83%) has to sustain above 19000 to bounce back to 19400-19600. Else an extended fall to 18800-18700 cannot be avoided.

Nikkei (30634.50, -2.02%) has declined failing to rise above 31500. This is contrary to our view to see a test of 32000 on the upside. A retest of 30500 looks possible. Thereafter failure to bounce back from 30500 can see a further fall towards 30000.

Shanghai (2967.53, -0.22%) has fallen back below 2975. Outlook is mixed. A range of 2900-3000 may hold for some time.

Brent and WTI have rebounded from their support levels and may look to rise further from here. Gold and Natural gas remains bullish for the near term. Silver is inching down towards its lower end of the 22.50/80-24 range. Need to see if silver holds above 22.50 or not. Copper is likely to consolidate within 3.65-3.50 for some time.

Brent ($ 89.90) has rebounded from a low of $ 86.67. If the bounce sustains, a rise towards $ 92-93 can be seen. On the downside support is at $ 86.

WTI ($ 85.26) has bounced back towards $ 86 as the support at $ 82 has held well. If the bounce sustains, a rise towards $ 87-88 can be seen.

Gold (1995.20) has risen towards its upper end of the 2000-1960 range. View remain same to see a break above 2000 and rise towards 2025-2030 while above the support at 1950-1940.

Silver (23.05) is inching down towards its lower end of the 22.50/80-24 range. It has to sustain above 22.50 to keep our bullish bias intact for a rise towards 25. Else a dip towards 22 can be seen.

Copper (3.5885) has declined below 3.60 failing to break above the upper end of the 3.65-3.50 range. It may continue to consolidate within the mentioned range for the near term.

Natural Gas (3.3850) has inched up further. It has scope to rise towards 3.50 in the near term.

11:45 17:15 ECB Mtg
Expn – …Expected 4.50% …Previous 4.50%

12:30 18:00 US Durable Goods Orders
Expn 0.3% …Expected 1.9% …Previous 0.2%

12:30 18:00 US GDP
Expn – …Expected 4.5% …Previous 2.1%

DATA YESTERDAY:
————–
1:30 07:00 AU CPI
Expn 5.6% …Expected – …Previous 6.0% …Actual 5.4%

8:00 13:30 GER IFO Business Climate
Expn 85 …Expected 85.9 …Previous 85.8 …Actual 86.9

8:00 13:30 GER IFO Business Situations
Expn 87.6 …Expected 88.5 …Previous 88.7 …Actual 89.2

8:00 13:30 GER IFO Business Expectations
Expn 83.5 …Expected 83.3 …Previous 83.1 …Actual 84.7

14:00 19:30 US New Home Sales
Expn 659K …Expected – …Previous 676K …Actual 759K

14:00 19:30 BOC Meeting
Expn – …Expected – …Previous 5.00% …Actual 5.00%