Some volatility was seen on the Dollar Index, Euro and USDJPY yesterday after the FOMC minutes was released but seems to have subdued impact on the markets. Sell off in Dollar Index triggered after the recent US inflation data release may continue to push the index down to 102 or lower while Euro can hold below 1.10 and USDJPY can fall to 148/146 before showing some reversal. EURJPY can fall to 161/160 while Aussie and Pound look bullish for a potential rise to 0.66/67 and 1.26/28. However, there could be some initial pause from 0.66 and 1.26 before the upper targets are met. USDRUB needs a bounce back from 88 else could be strongly bearish. USDCNY is bearish to 7.10/7.05. EURINR has fallen while below resistance at 92 and could now be headed towards 90.50-90 while USDINR could head towards 83.50 while it sustains trade above 83.30.

Dollar Index (103.522) tested 103.178 before rising slightly from there. Overall view continues to be bearish for a fall towards 102 on a confirmed break below 103.

EURUSD (1.0918) went up to 1.0965 before coming off slightly from there. But overall uptrend remains intact with immediate target of 1.10. Price action around 1.10 would be important to watch as there are high chances of reversals from there.

EURJPY (161.78) has been falling since last 5-sessions and is currently headed towards immediate support of 161, which if holds can produce a short rise towards 162 or slightly higher before resuming its fall towards 160.

Dollar-Yen (148.23) rose sharply from 147.15 seen yesterday. But overall view is bearish while below 150. A pause near 148/147/146 region could be possible in the near term with a slow corrective bounce towards 150 in the coming weeks.

USDCNY (7.1384) looks stable just now but has enough room for a fall to 7.10/05.

Aussie (0.6557) could find some resistance around 0.66 which if holds could keep the trade within 0.66-0.65 for sometime before a further rise to 0.67 is seen.

Pound (1.2539) looks bullish towards 1.26 from where a slight corrective fall is possible before resuming further upmove. Else, a break above 1.26 if seen in the next few days could be bullish for a rise towards resistance near 1.27/28.

USDRUB (88.1940) continues to move towards the lower end of the 88-90 region. It would be crucial to watch price action at 88.

USDINR (83.36) broke above 83.30 and moved up to 83.3650 yesterday. Slow rise if sustains above 83.30 can take the pair towards 83.50 soon.

EURINR (90.9441) fell sharply from 91.40 and could continue to dip towards 90.50-90 as 92 could hold as crucial resistance.

The US Treasury yields are poised at their crucial support. A strong rise from here would be bullish and will avoid the danger of seeing an extended fall. The German yields are coming down as expected. They have room to test their supports after which a reversal is possible. The 10Yr GoI can rise further if it breaks above the immediate resistance and then fallback again. The 5Yr GoI can move up within its sideways range.

The US 10Yr (4.40%) and the 30Yr (4.56%) yields are poised at their crucial support. A bounce from here and a subsequent rise past 4.5% and 4.7% will be bullish. It will avoid the chances of an extended fall to 4.3%-4.2% (10Yr) and 4.45%-4.35% (30Yr).

The German 10Yr (2.56%) yield has bounced while the 30Yr (2.77%) is coming down towards 2.5% (10Yr) and 2.6%-2.7% (30Yr) in line with our expectation. Thereafter a fresh rise is possible.

The 10Yr GoI (7.2706%) continues to move up. A rise above 7.28% can take it up to 7.3% and then a fall back to 7.2%-7.15% is possible. A sustained rise past 7.3% will negate that fall.

The 5Yr GOI (7.2625%) is moving up within its 7.2%-7.3% range. A breakout on either side of 7.2%-7.3% will decide the next move.

Dow Jones has dipped slightly but broder outlook remains bullish for a test of 35400-35500 on the upside. DAX is stable and may consolidation between 15800 and 16000 for some time. Nifty has risen within its sideways range but needs a decisive break on the upside to strengthen the momentum further. Nikkei outlook is mixed. Shanghai can fall towards 3025 before rising back from there.

Dow (35088.29, -0.18%) has dipped slightly. Support is around 34800. View remains bullish to see 35400-35500 before a reversal is seen.

DAX (15900.53, -0.01%) remains stable. As mentioned yesterday, a consolidation between 15800 and 16000 is possible before a rise to 16500-16600 happens.

Nifty (19783.40, +0.45%) has risen. But a sustained break above 19850 is needed to move up to 20000. Else it can continue to oscillate between 19500 and 19850.

Nikkei (33545.50, +0.57%) bounced back sharply towards 33500 from a low of 33182.99. Outlook is mixed. A decisive break on either side of the 33500-33000 is needed to decide if it will rise towards 34000-34300 or falls towards 32500.

Shanghai (3061.90, -0.20%) has come down from yesterday’s high of 3089.77. If the fall sustains, a dip towards 3025 can be seen before moving up towards 3100-3125.

Brent and WTI remains stable but view is bullish for a rise towards their resistance in the near term. Gold and Silver outlook remain bullish. Copper has dipped from levels below 3.85 and if it sustains below 3.85, a further fall can seen. Natural Gas remains subdued and has scope to test 2.8-2.7 before a bounce back can happen.

Brent ($ 82.34) is gradually inching up towards $ 83. View is bullish for a rise towards $ 84-85 while above $ 81-80.

WTI ($ 77.65) lacks momentum to rise above $ 78. But while above the support at $ 76, there is scope for a break above $ 78 and rise towards $ 80-82.

Gold (1998.40) has risen towards 2000 as expected. A further rise to 2020 can be seen. Thereafter, a break above 2020 is needed to see a rally towards 2050. Support is at 1980-1960.

Silver (23.81) lacks strength to rise above 24. But while above 23.30, view will remain bullish for a rise towards 24.70 in the coming sessions.

Copper (3.7990) has dipped from 3.8325. A strong break above 3.85 could pave the way towards 3.90-4.00. Else it can fall towards 3.75.

Natural Gas (2.8560) continues to fall and has scope to test 2.8-2.7 before a reversal can happen towards 3.1.

13:30 19:00 US Durable Goods Orders
Expn 0.2% …Expected -3.2% …Previous 4.7%

DATA YESTERDAY:
————–
13:30 19:00 CA Inflation Y/Y
Expn 3.5% …Expected 3.6% …Previous 3.9% …..Actual 3.6%

15:00 20:30 US Existing Home Sales
Expn 3838K …Expected 3900K …Previous 3950K …..Actual 3790K