The Dollar Index is moving towards the upper end of its range of 103.90-104.60 but is bearish while below 105. Meanwhile, Euro has broken below its support near 1.077 and could be bearish to 1.07 now. EURJPY could witness a fall to 160-159, while it trades below 161. USDJPY looks a bit indecisive for now but is bearish below 150. USDCNY is closed for the week. Aussie could trade within 0.6550-0.6470 while Pound is stable within 1.2570-1.27 region. EURINR tested 89.67 on the upside before declining and could now be bearish to 89-88 in the near term while below 90. USDINR continues to trade within 83.05-82.90/80. Important data release to watch out today is US CPI.

Dollar Index (103.98) is heading towards the upper end of its range of 103.90-104.60 contrary to our expectation of seeing a break below 103.90 to test 103.50 first. However, our overall directional view seems to be going well. A decisive break past 104.60 will be needed to test 105 on the upside from where a sharp reversal is expected in the medium term.

EURUSD (1.0764) dipped from 1.0806 itself, unable to sustain higher. A test of 1.0740-1.0700 is likely to happen in the coming sessions, unless an immediate bounce is seen from current levels. Overall, the immediate broad range of 1.07-1.0850 and narrow range of 1.0740-1.0800 may hold for the near term.

EURJPY (160.88) failed to sustain its rise past 161 and has dipped slightly from there. Immediate supports can be seen near 160-159 and while below 161, it would be vulnerable to test the mentioned supports.

Dollar-Yen (149.46) has become somewhat stable over the last 3-sessions and looks like it can test 150 before dipping back towards 149 or lower in the medium term.

USDCNY (7.1924) is closed this week. Trading will resume from next week.

Aussie (0.6519) has not been able to break above 0.6550 and has dipped instead. Narrow range of 0.6550-0.6480 can hold for the very near term.

Pound (1.2612) has again entered into a narrow range of 1.27-1.2570 seen over the past 5-6 sessions. Unless a sustained breakout is seen out of the broad 1.26-1.28 range, directional view for the medium term is unclear.

USDINR (83.0075) traded within 82.97-83.0350 range yesterday without the expected volatility as the IN-CPI release of 5.10% (YoY) was in line with the market expectations of 5.09%. A break above immediate resistance at 83.05, if seen, can take it higher towards the next resistance at 83.20. Else it can trade within 83.05-82.90/80 for some time.

EURINR (89.3099) rose to the level of 89.6796 yesterday, slightly lower than our expected target of 89.80/90 before coming down. Now as mentioned earlier, it can fall back towards 89/88 while below 90. Immediate range of 90-89/88 may hold.

The US Treasury yields remain higher but stable. Resistances are ahead which can cap the upside and trigger a fresh fall and keep the broader downtrend intact. The US CPI data release today is important to watch. The German yields are hovering around their key resistances. We expect the yields to fall back and resume their overall downtrend going forward. The 10Yr and 5Yr GoI have room to rise from here before witnessing a reversal.

The US 10Yr (4.17%) and the 30Yr (4.37%) yields remain stable. 4.2% (10Yr) and 4.4% (30Yr) are key resistances that can cap the upside. A fresh fall from there will keep the overall downtrend intact and drag the yields down to 4% (10Yr) and 4.2% (30Yr).

The German 10Yr (2.36%) and the 30Yr (2.55%) yields are hovering around their key 2.35% (10Yr) and 2.6% (30Yr). We expect the yields to fall back and resume their downtrend from here targeting 2% (10Yr) and 2.2%-2.1% (30Yr) on the downside.

The 10Yr GoI (7.0935%) has dipped slightly. There is room to test 7.15%-7.18% on the upside. However, while below 7.2%, the broader view is bearish to see a fall to 6.9%-6.8% eventually.

The 5Yr GOI (7.0570%) remains stable. While above 7.04%-7.03%, a rise to 7.1% is possible. The thereafter will need a close watch to see if the rise is extending or the yield is reversing lower.

Dow Jones and Nikkei have resistance overhead which may hold and produce a fall back from there. DAX has broken its sideways range on the upside to target its next key resistance. Nifty has declined sharply on Monday and looks vulnerable to break below its immediate support.

Dow (38797.38, +0.33%) can rise to 39000-39300 first while above 38500. Thereafter a strong correction is possible. 38100-38000 is the lower important support.

DAX (17037.35, +0.65%) has just broken the 16800-17000 range. If this sustains, 17200-17500 can be seen on the upside. Thereafter a corrective fall can be seen.

Nifty (21616.05, -0.76%) has come down and looks vulnerable to break 21500 and fall to 21000. That would also increase the danger of witnessing a deeper fall going forward. 21800-21850 can be a good resistance now.

Nikkei (37623.35, +1.97%) has risen sharply above 37000 as expected. A test of 38000 looks possible. 38000 is a decent resistance seen on 3-day and weekly candles. If that holds, a dip towards 37000-36000 can be seen. Only a strong break 38000 could see a rise towards 39000.

Shanghai (2865.90) is closed for this week.

Crude prices remain higher and have to scope to see a test of their key resistance in the near term before a fall back can happen. Gold and Silver are likely to trade sideways while above the support at 2000 and 22 respectively. Copper has bounced from 3.65 itself and could extend the bounce further towards 3.80. Natural Gas is drifting lower towards its key support from where a bounce back is expected to be seen. All eyes are on US CPI data which could bring in some volatility today.

Brent ($ 82.04) has managed to hold higher around $ 82. Chances of rise towards $ 84-85 remains as long as it holds above $ 80. Then a fall can be seen towards $ 80 or maybe lower.

WTI ($ 76.99) lacks follow through rise above $ 77. However, a rise towards $ 78-80 is still possible while above the support at $ 74.50-74. Then a fall can be seen towards $ 75-74.

Gold (2033.60) has been coming down over the last few days. Key immediate support are at 2020-2000. While above 2000, we can expect Gold to trade sideways within 2000-2080 for a while. A break below 2000 is needed for bearishness.

Silver (22.78) rose sharply to test 23.15 yesterday before coming off from there to trade below 23. A broad sideways range of 22-23.50 can hold for some time. Chances of 24 is also there as long as it holds above 22.

Copper (3.7330) has bounced back as it is getting good support at 3.65. We had expected it to come down further to 3.60 in the previous readings before a bounce back can be seen. If the bounce sustains above 3.70, a further rise towards 3.80 is possible.

Natural Gas (1.76) is heading down towards 1.7-1.5 as expected. Thereafter, a bounce back can happen towards 2.0-2.1.

7:00 12:30 UK Unemp
Expn 4.2% …Expected 4.0% …Previous 4.2%

7:30 13:00 CH CPI
Expn 1.4 …Expected 1.6 …Previous 1.7

13:30 19:00 US CPI (MoM)
Expn 0.4 …Expected 0.2 …Previous 0.3

13:30 19:00 US Core CPI (MoM)
Expn 0.3% …Expected 0.3% …Previous 0.3%

DATA YESTERDAY
—————
2:00 17:30 IN IIP
Expn 4.8% …Expected 2.4% …Previous 2.4% …Actual 3.8%

12:00 17:30 IN CPI
Expn 5.54 …Expected 5.09 …Previous 5.69 …Actual 5.10