The Dollar Index tested 104.5 before coming down. View is bearish to 104-103.5 in the near term, which corresponds to Euro holding well above the support near 1.07 and rising towards 1.08-1.085. EURJPY and USDJPY now look bearish to 158 and 147.5-146 respectively in the near term. USDCNY failed to rise past 7.20 and could soon test its support at 7.18 before attempting to rise back. Aussie rose sharply above 0.65 contrary to our bearish view, post the RBA policy statement but needs to break past 0.655/0.66 to rise further. Pound held the support of 1.25 quite well and is now back within its earlier range of 1.26-1.28. EURINR is slowly inching down towards our mentioned targets of 89-88. USDINR could hold below immediate resistance at 83.10 to fall back towards 83.00-82.90

Dollar Index (104.078) seems to be holding well below the expected resistance of 105 as the Index started coming down on testing 104.60 itself. Further if the fall continues, it could drag it down towards 104-103.5 in the coming sessions. Overall, view remains bearish below 105.

EURUSD (1.0764) made an intra-day low of 1.0723 yesterday before rising back and as long as it sustains above its support of 1.07, a further rise to 1.08-1.085 could be seen in the coming sessions.

EURJPY (159.18) has been slowly inching down towards the lower end of its immediate range of 161-158 mentioned yesterday. A decisive break below 159 will take it down towards 158.

Dollar-Yen (147.89) failed to sustain above 148 and has dipped slightly below it. The 149 can now act as an interim resistance and while below it, a further fall to 147.5-146 could be seen in the near term.

USDCNY (7.1869) rose to the level of 7.1982 (just below 7.20) but has not been able to break past it. Immediate support can be seen around 7.18 from where a rise back towards 7.20 or higher looks possible. Below 7.18 lower support is visible near 7.16.

Aussie (0.6534) surged rapidly above 0.65, contradicting our bearish view of a fall towards 0.64–0.635. The rise came after the RBA policy meeting yesterday where the central bank kept rates unchanged but stated that “a further increase in interest rates cannot be ruled out”. Chances of rate cut discussion may not happen soon for Australia. On the charts, a break past 0.655/0.66 is required to continue rising. Else while below 0.66, view remains intact to see a fall towards 0.64-0.635 eventually.

Pound (1.2606) held the anticipated 1.25 support level merely well and is currently back in the 1.26–1.28 region. A rebound in the direction of 1.28 appears probable. Thereafter a decisive break past it would be needed to get further clarity in the view. Until then, the range may persist for a while.

USDINR (83.06) is holding below the interim resistance at 83.10 and while that holds, the pair may re-attempt to fall back to 83.0-82.90 in the near term. On the upside, a decisive break above 83.10 could pave way for higher resistance at 83.20.

EURINR (89.3949) has risen from 89.06. While above 89, the pair could move up towards 89.80/90 but overall view is bearish in the medium term while below 90.

The US Treasury and the German yields have come down. As mentioned yesterday, resistances are there to cap the upside from here and keep the overall down trend intact. While below the resistances, both the US Treasury and German yields are likely to see a fresh fall. The 10Yr and 5Yr GoI remain higher but stable. There is room to rise further from here before resuming their downtrend. The RBI meeting outcome tomorrow is an important event to watch.

The US 10Yr (4.08%) and the 30Yr (4.28%) have come down. We reiterate that 4.2% (10Yr) and 4.4% (30Yr) are crucial resistances. While they hold, the yields can fall back to 4% (10Yr) and 4.2% (30Yr).

The German 10Yr (2.29%) and the 30Yr (2.51%) yields have dipped slightly. As mentioned yesterday, resistances at 2.35% (10Yr) and 2.6% (30Yr) can cap the upside and a fresh fall to 2% (10Yr) and 2.2%-2.1% (30Yr) can be seen going forward.

The 10Yr GoI (7.0904%) is oscillating between 7.06% and 7.1%. The broader trend is down to see 6.9%-6.8% on the downside. But an extended corrective rise to 7.2% is possible on a break above the 7.1%-7.2% resistance zone before the overall downtrend resumes.

The 5Yr GOI (7.0132%) remains stable above 7%. While above 7%, a rise to 7.1% is possible and the price action after that will have to be watched.

Most of the equities have rallied well and looks bullish to rise towards their crucial resistance in the near term from where a corrective fall can happen. Nikkei, on the other hand, can remain consolidative for some time.

Dow (38521.36, +0.37%) has risen back. As mentioned yesterday, 31800 is a good support while above which the chances are high for the Dow to rise towards 39000-39300. Thereafter a strong correction is possible.

DAX (17033.24, +0.76) has broken the 16800-17000 range on the upside as expected. While this break sustains, a rise to 17500 can be seen. Thereafter a reversal is possible.

Nifty (21929.40, +0.72%) is holding well above 21700. The fall to 21600-21500 and lower mentioned yesterday is not happening. A rise to 22150 (first) and then to 22500 looks likely now before a sharp correction happens.

Nikkei (36115, -0.13%) remains stuck within 36500-35500 range. We will wait for a decisive break to happen on either side of the range to see it rises towards 37000 or breaks lower towards 35000.

Shanghai (2811.54, +0.79%) has risen sharply, breaking above 2750 contrary to our view that it can hold and keep the downtrend intact. It may now rise towards the resistance at 2880-2900. While 2900 holds, a fall back towards 2700 or lower is possible.

Crude prices are on corrective rise but have resistance ahead which can hold and keep the overall downtrend intact. Gold, Silver and Copper have recovered as the mentioned supports are holding well and have room to move up further in the near term. Natural Gas is attempting to break below its key support of 2.0 and looks vulnerable to fall towards 1.7-1.5 in the coming weeks.

Brent ($ 78.88) has moved up towards $ 79. Can test $ 80-81 before turning down towards $ 75-73.

WTI ($ 73.58) has risen towards $ 74. A test of $ 76 looks likely before it can resume the fall towards $ 70-68.

Gold (2051.30) has moved up to 2050 as the support mentioned at 2020 is holding well. While above 2020, there are chances of rise towards 2080-2100.

Silver (22.52) has recovered slightly as the support at 22.30 seems to holding well. While above 22.30-22, a rise towards 23.50-24.00 is possible in the coming days.

Copper (3.7930) has bounced back towards 3.80 as the support at 3.75 has held well as expected.A further rise towards 3.85 is possible while above 3.75.

Natural Gas (2.0130) has come down towards the lower end of 2.20-2.00 range and is attempting to break on the downside. A clear break below 2.0 can lead to a fall towards 1.7-1.5.

22:30 04:00 AU PMI
Expn -26.8 …Expected – …Previous -25.3

13:30 19:00 US Trade Balance
Expn – …Expected -62.3$ Bln …Previous -63.2$ Bln

DATA YESTERDAY
—————
4:30 10:00 RBA Meeting
Expn – …Expected 4.35% …Previous 4.35% …Actual 4.35%

10:00 15:30 EU Retail Sales
Expn -0.8% …Expected -0.9% …Previous 0.3% …Actual -1.1%