Dollar Index plunged after the NFP data release on Friday taking most other currencies up against the Dollar. The Dollar Index has fallen to test 105 but need to see if it can bounce back from here or head lower towards 104. Euro and EURJPY trade higher and may test 1.0750-1.08 and 161-162 while above 1.07 and 160 respectively. USDJPY is holding above 148.70 and could rise slowly towards 149-150 again soon. Aussie and Pound have risen sharply but needs to sustain above 0.65 and 1.23 to move higher in the near term. USDCNY has fallen sharply and could now head towards 7.25. USDRUB is headed towards 90 as expected. USDINR may open gap down near 83. EURINR has risen well and could head towards 89.

Dollar Index (105.078) fell sharply after the lower than expected NFP data release. It would be crucial to see if the index breaks and sustains below 105 which would be further bearish for a fall towards 104-103 in the coming weeks. Else a bounce from 105 can lead to a corrective rise to 105.50/70 over the next few sessions before resuming the fall.

EURUSD (1.0731) has risen sharply to levels above 1.07 and needs to sustain to target 1.08 or higher. Else a corrective dip to 1.07-1.0650 cannot be negated this week. Overall a break above 1.08 is needed to pick up upside momentum.

EURJPY (160.55) has moved up while above 159. A further rise to 161-162 looks possible soon.

Dollar-Yen (149.58) has risen slightly after 3-consecutive sessions of fall from 151.72. An immediate range of 151.72-148.70 may hold for the next few sessions.

USDCNY (7.2822) has declined contrary to our expectation of seeing an eventual rise towards 7.35. Now, while below 7.30, there is scope for a fall to 7.25.

Aussie (0.6513) has risen above 0.65 on dollar weakness. A test of 0.66/67 is possible if Aussie manages to sustain trade above 0.65 and slowly move up.

Pound (1.2374) has also shot up. Pound could face a small resistance near 1.24 from where a rejection looks possible before attempting to rise further towards 1.25/26.

USDRUB (91.7040) has come off below 92 as expected and could now fall towards 90 before a sharp reversal is seen.

USDINR (83.29) closed at the day’s high on Friday. But now on sharp Dollar weakness, the pair is likely to open with a gap down near 83.00. But whether it would sustain or not has to be seen over the next few sessions. NDF currently quotes 83.07

EURINR (89.3881) has moved up well. It is to be seen if the pair would face rejection from 89.50-90 in the near term to fall back towards 89 else the upmove can continue.

The US Treasury yields have declined further after the jobs report on Friday. The US NFP increased by 150K as against the market expectation of 178K. The yields can fall further to test their supports and then bounce back thereafter. The German yields have declined below their supports thereby negating our view of seeing a bounce back. Further fall is possible. The 10Yr and 5Yr GoI are poised just above their key supports. Failure to bounce from here can drag them further lower.

The US 10Yr (4.59%) and the 30Yr (4.78%) yields are coming down towards 4.5% and 4.7%-4.6% respectively. Thereafter a bounce is possible.

The German 10Yr (2.64%) and the 30Yr (2.91%) have declined below their 2.7% and 3% supports respectively. While this break sustains, a test of 2.6% (10Yr) and 2.85%-2.8% (30Yr) is possible now.

The 10Yr GoI (7.3140%) has dipped. It has to hold above 7.3% to retain its 7.3%-7.4% range and avoid a fall to 7.25%.

The 5Yr GOI (7.2961%) yield has dipped below 7.3%. Support is at 7.28%. A bounce from there can take it back up to 7.4%. Else a fall to 7.25% and lower levels is possible.

Equities look bullish for the near term. Dow Jones and Dax can rise further on a break above 34200 and 15200 respectively. Nifty has scope to test 19400-19500 on the upside. Nikkei has risen sharply and has scope to test its key resistance before a reversal can be seen. Shanghai is attempting to rise above its resistance at 3050.

Dow (34061.32, +0.66%) has risen into the 34000-34200 region. A break above 34200 can take it further up to 34600.

DAX (15189.25, +0.30%) has closed just below 15200. As mentioned earlier, an extended rise to 15400-15500 can be seen before reversing lower again.

Nifty (19230.60, +0.51%) has room to test 19400-19500. But thereafter we expect it to come down again and keep the downtrend intact to test 18700-18600.

Nikkei (32,705, +2.38%) has risen further well above the expected level of 32500. Outlook is bullish for a test of 33500 before a reversal can be seen from there.

Shanghai (3048.74, +0.59%) is attempting to break above the resistance at 3050. A rise towards 3100 looks likely in the near term.

Brent and WTI have fallen back toward their support after failing to break above $ 88 and $ 84 respectively. Need to see if the support holds and produces a bounce back for crude prices or not. Gold and Silver saw a rally last Friday on the release of weaker-than-expected US NFP data which come in at 150K than the market expectation of 178K but are likely to remain ranged for some time. Copper lacks the strength to rise above its immediate resistance. Natural gas remains mixed and has declined towards the lower end of the 3.30-3.70 range.

Brent ($ 85.36) has fallen back failing to rise past $ 88. It has to sustain above $ 84 to see a rise towards $ 89-90. Else a further dip towards $ 83-82 can be seen.

WTI ($ 81.09) rose to $ 83.60 last Friday in line with our expectations for a rise towards $ 84 and has fallen back from there. It has to sustain above $ 80 and rise past $ 84 to reduce the downside pressure and to see a rise towards $ 86. Else can dip towards $ 78.

Gold (1998.20) appears ranged within 1980-2020. The outlook remains bullish for a break on the upside and rises towards 2025-2030 while 1980. Only a break lower can bring 1960-1950 into the picture.

Silver (23.33) has bounced back sharply above 23. Outlook is mixed for the near term. The 22.50-24 range may continue to hold for a while.

Copper (3.6890) lacks strength to rise above 3.70. A sustained break above 3.70-3.73, can see a rally towards 3.80. The downside seems limited to 3.60.

Natural Gas (3.3870) remains mixed and has declined towards the lower end of the 3.3-3.7 range. A break below 3.3, if seen, can be bearish for a fall towards 3.1-3.0.

No major data release today.

DATA FRIDAY:
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5:00 10:30 IN Services PMI
Expn 59.9 …Expected – …Previous 61.0 …Actual 58.4

10:00 15:30 EU Unemp
Expn – …Expected 6.4% …Previous 6.4% … Actual 6.5%

12:30 18:00 US NFP
Expn 286K …Expected 178K …Previous 297K … Actual 150K

12:30 18:00 US Unemployment Rate
Expn 3.7% …Expected 3.8% …Previous 3.8% … Actual 3.9%

12:30 18:00 US Avg Hrly Earnings
Expn 0.3% …Expected 0.3% …Previous 0.3% … Actual 0.2%

12:30 18:00 US Average Hourly Earnings Production & Non Supervisory Employees
Expn 0.1% …Expected – …Previous 0.3% … Actual 0.3%

12:30 18:00 CA Labour Force
Expn – …Expected 20.2K …Previous 63.8K …Actual 17.5K