The Dollar Index has turned down after facing rejections from 106 whereas the Euro has bounced back as the support at 1.0650 has held well. EURJPY has scope to test 162 from where a decline looks possible. USDJPY can test 151.63-152 on the upside. The Aussie and Pound look bearish below 0.6450 and 1.24 respectively. USDCNY is rising steadily and has scope to target further upside while above 7.25/26. USDRUB is bearish while below 94/93. USDINR may continue trade between 83.20-83.30. The EURINR can possibly trade within 88.50-89.50 for the near term.

Dollar Index (105.472) tested 105.872 before coming off from there in line with our expectation of a possible fall from 106. While below 106, the index has scope to fall towards 105 or lower in the coming days.

EURUSD (1.0715) may hold above 1.0650 on first testing and could trade within 1.0750-1.0650 for the next few sessions.

EURJPY (161.63) has moved up and could test resistance near 162 from where a decline looks possible. A break above 162 if seen can take it further up in the medium term.

Dollar-Yen (150.85) has also risen well and has scope to test 151.63-152 before falling from there.

USDCNY (7.2808) could attempt to rise slowly towards 7.30 while above 7.25/26

Aussie (0.6415) could not sustain above 0.6450 and has fallen sharply from there reinforcing a possible decline towards 0.6350-0.63 in the next few sessions.

Pound (1.2289) can fall towards 1.22 or lower in the coming days. View is bearish while below 1.24.

USDRUB (91.7822) has scope to see slow fall towards 90 while below 94/93.

USDINR (83.2775) continues to trade within the narrow 83.20-83.30 region.

EURINR (89.1976) has bounced back from 88.75. It could possibly trade within 88.50/75-89.50 for the next few sessions.

The US Treasury and the German yields are coming down in line with our expectation. There is room for both the yields to fall more from here to test their supports. After that a fresh rise is possible. The 10Yr is coming down as expected and can fall more. But the 5Yr has support coming up. We will have to wait and watch whether that support is holding or not.

The US 10Yr (4.49%) and the 30Yr (4.63%) yields have declined further. They can test 4.4% (10Yr) and 4.6%-4.55% (30Yr) and then possibly reverse higher again.

The German 10Yr (2.61%) and the 30Yr (2.80%) have declined sharply. The 10Yr is heading down towards 2.5% as expected. The 30Yr can fall to 2.6%-2.5% on a break below 2.8%.

The 10Yr GoI (7.2711%) is coming down as expected. A break below 7.25% can take it down to 7.2%-7.15% in the coming days. Resistance will be at 7.3%.

The 5Yr GOI (7.2511%) has support at 7.2% which will need a close watch. A bounce from there can take it up to 7.3%-7.35%. Else an extended fall to 7.1% and lower levels can be seen. It is a wait and watch.

Dow Jones need a sustained break above 34200 to negate the danger of seeing a fall back. DAX has scope to test 15400-15500 before turning lower from there. Nifty upside looks capped at 19500-19600. Nikkei has bounced back as the support at 32000 has held well as expected. Shanghai remains stable but outlook remains bullish while above the support at 3025.

Dow (34112.27, -0.12%) broke above 34200 but did not sustain. As mentioned yesterday a strong break above 34200 is needed for a rise to 34600-35000. Else a fall below 34000 is possible.

DAX (15229.60, +0.51%) can test the 15400-15500 resistance first and then come down to 15000 and lower thereafter.

Nifty (19443.50, +0.19%) sustains higher. We retain our view of the 19500-19600 resistance to hold and drag the index down to 19000 and 18700-18600 eventually.

Nikkei (32495, +1.02%) has bounced back as the mentioned support at 32000 has held well. While above 32000-31500, view is bullish for a rise towards 33000-33500.

Shanghai (3055.96, +0.12%) continues to oscillating around 3050. Bias is positive for a rise towards 3100 while it stays above 3025.

Crude prices and Natural Gas are near their crucial support which is expected to hold and produce a bounce back from there. Gold, Silver and Copper remains bearish for the near term.

Brent ($ 80.02) has declined towards the support at $ 79-78.50. While these hold, a bounce back towards $ 84-85 can be seen. Only a strong break below $ 78.50, if seen, can lead to a deeper fall towards $ 75-74.

WTI ($ 75.82) has declined towards the support at $ 75-74. We expect a bounce back to be seen from here towards $ 80. Only a decisive break below $ 74 can open doors towards $ 70.

Gold (1956.10) continues to dip. A test of 1950 or 1925 can be seen before rising back towards 1980.

Silver (22.59) is attempting to break below the support at 22.50. A fall towards 22-21.80 looks possible before a reversal can be seen.

Copper (3.6445) has fallen below 3.65 as expected and is likely to come down towards 3.60 or even lower towards 3.55 before a possible bounce back can be seen.

Natural Gas (3.12) continues to fall but while above the support at 3.0, bias is positive for a rise towards 3.3.

1:30 7:00 CN CPI (YoY)
Expn – …Expected -0.2 …Previous 0.0

1:30 7:00 CN PPI
Expn – …Expected -2.8 …Previous -2.5

DATA YESTERDAY:
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10:00 15:30 EU Retail Sales
Expn -0.2% …Expected -0.2% …Previous -0.7% …Actual -0.3%