Dollar Index and Euro face volatility ahead of the ECB meeting tomorrow and crucial data releases on US GDP and PCE over the rest of the week. The Dollar Index can head towards 104 while a fall in Euro towards 1.08 cannot be negated. EURJPY and USDJPY could have scope for a dip towards 160 and 148/147 in the near term. USDCNY can fall towards 7.15/12 while Aussie could be bearish towards 0.65 while below 0.66. Pound could fall within 1.2755-1.26. EURINR has bounced from crucial support at 90 and needs to sustain to move up to 91 else can again attempt to fall below 90. USDINR trades within near term range of 83.05-83.20 but we need to see a decisive break on either side as there are equal chances of seeing either a rise to 83.25/30 or a fall to 83.00/82.90.

Dollar Index (103.533) fell to test the near term trend support at 102.9820 before rising back from there. While above 102.98-103, view is likely to be bullish for a rise towards 104.

EURUSD (1.0855) fell to 1.0821 before trading higher currently. While below 1.09, there could be chances of a fall to 1.08.

EURJPY (160.83) has dipped below 161 which if sustains can bring the pair down slowly towards support at 160 from where a bounce can be possible in the medium term.

Dollar-Yen (148.14) has been fluctuating below 148.80 over the last 5-sessiosn and look sideways ranged for the near term within 149-146 zone. Immediate range could be narrower within 149-148.

USDCNY (7.1731) is falling as expected and could test 7.15/12 soon.

Aussie (0.6568) has been highly volatile in the last 2-sessions and has been unable to sustain above 0.66. There is room for a fall to 0.65 on the downside which could gain more weightage if Aussie continues to trade below 0.66 for another couple of sessions. View is biased towards bearishness while below 0.66.

Pound (1.2691) could fall to 1.26 and trade within an immediate range of 1.2755-1.26 for the near term.

USDINR (83.1550) traded within the nearer range of 83.05-83.17 yesterday as expected. While the range of 83.20-83.05 remains intact, we need to see a decisive break on either side as there are equal chances of seeing either a rise to 83.25/30 or a fall to 83.00/82.90.

EURINR (90.2924) bounced back sharply from 90 and needs to sustain the rise from here to continue moving up towards 90.50-91 else could re-attempt to fall to 90 or lower. Watch price action near 90.

The US Treasury and the German yields have bounced back. But resistances are likely to cap the upside on both of them and trigger a fall to keep the broader downtrend intact. The ECB Meeting tomorrow and the US PCE data release on Friday are important events to watch this week that can influence the yield movement. The 10Yr and 5Yr GoI have dipped. Their resistances are holding well, and bearish view remains intact to see more fall going forward.

The US 10Yr (4.13%) and the 30Yr (4.37%) yields have risen back again. 4.2%-4.25% (10Yr) and 4.45%-4.5% (30Yr) can be tested but thereafter we can expect the yields to turn down and resume the downtrend. That can take the yields below 4% (10Yr) and 4.2% (30Yr) again.

The German 10Yr (2.35%) and the 30Yr (2.53%) yields have risen back to their respective resistance of 2.35% and the 2.5%-2.6%. We expect this resistance to hold and drag the yields down to 2% (10Yr) and 2.2%-2.1% (30Yr) thereby resuming the downtrend.

The 10Yr GoI (7.1751%) and 5Yr GOI (7.0628%) yields have dipped. View remains the same. While below 7.2% (10Yr) and 7.08%-7.1% (5Yr) the outlook is bearish to see a fall to 7.1% (10Yr) and 7%-6.95% (5Yr).

Dow Jones has dipped below 38000 and a further fall from here can negate the rise mentioned yesterday. DAX overall outlook is bearish while below the long term resistance at 17000. Nifty has fallen sharply below 21250 but might see a corrective bounce from its next immediate support before a deeper fall happens. Nikkei rally got stalled at 37000 as expected. Outlook is bearish for Nikkei. Shanghai has bounced back a bit but broader downside will remain intact while below the resistance at 2830-2850.

Dow (37905.45, -0.25%) has dipped below 38000. A further fall from here can negate the rise to 38300 mentioned yesterday. In turn, that can drag the Dow Jones down to 37500 and lower.

DAX (16627.07, -0.34%) broke 16700 but failed to sustain. This keeps the danger alive of seeing a fall to 16000-15800.

The fall to 21000 on the Nifty (21238.80, -1.54%) is happening in line with our expectation. A corrective bounce from 21000-20900 towards 21500 is a possibility before a deeper fall happens.

The mentioned resistance at 37000 has held well for Nikkei (36286.50, -0.63%) and it has indeed fallen towards 36200. It can fall further to 35800-35500.

Shanghai (2767.79, -0.11%) saw a low of 2724.15 yesterday and has bounced back a bit. Good resistance is seen at 2830-2850. While these hold, the bearishness remains intact for a fall towards 2700-2650.

Crude prices remain consolidative but broader picture remain bullish for an eventual break on the upside of the range while the supports hold. Gold looks mixed and range bound. Silver and Natural Gas have to scope to rise towards the immediate resistance. If they break there can be chances of further bullishness next weak. Copper can witness good rise while above 3.80-3.78.

Brent ($ 79.66) is consolidating below $ 81. The broad $ 82-75 range can hold for some time. Within this, interim support is seen at $ 77-77.50, while above which, there are chances of $ 82. Overall bias is positive to see a break above $ 82 and rise towards $ 85.

WTI ($ 74.46) is consolidating below $ 76. The $ 76-70/68 range remains intact. Within this interim Support is seen at $ 71. Broader picture is bullish for an eventual break above $ 76 and rise towards $ 78-80 while above $ 71-70.

Gold (2028.50) looks mixed. It can trade sideways within 2050/2040-2000 for some time.

Silver (22.55) has risen above 22.50 as the support at 22 held well. A test of key resistance at 23 looks likely. While above 22, there can be chances of a break above 23 and rise towards 23.30-23.50.

Copper (3.8035) has risen above 3.80. There are chances for a rise towards 3.83-3.85 while above 3.80-3.78.

Natural Gas (2.5070) has indeed moved up from the support mentioned at 2.30-2.25. It can rise further towards the resistance at 2.60-2.70. Thereafter we need to see if it falls back or breaks above 2.70.

14:45 20:15 BOC Meeting
Expn – …Expected 5.0% …Previous 5.0%

DATA YESTERDAY
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3:00 08:30 BOJ Meeting
Expn – …Expected -0.10% …Previous -0.10% …Actual -0.10%