Dollar Index and USDCNY trades within 104.50-103.50 and 7.19-7.20 respectively, while USDJPY and EURJPY has fallen sharply but needs to further break below 149 and 162 respectively to make the outlook further bearish. Euro is trading near its resistance of 1.0850, and price action around it would be important to watch. Aussie has recovered from the low of 0.6478 and Pound after its failed attempt to sustain its rise past 1.2730, is currently back within the range of 1.2730-1.26. EURINR needs to produce a sharp rise past 90 to test 90.30/90.50 or higher in the near term. USDINR may hold within 82.80-83.00 for now.

Dollar Index (103.842) after nearing around 103.580; the lower end of its range of 103.50-104.50, it has moved up a bit. Overall, near term range of 103.50-104.50 may continue to hold for now.

EURUSD (1.0847) is hovering below the resistance of 1.085, a break past which is needed to rise further towards 1.09. Else the chances of the pair coming down towards 1.075 again can be seen in the near term. Watch price action near 1.0850.

EURJPY (162.66) could not sustain its rise and started to decline on testing 163.43, slightly below our mentioned target of 164. A further break below 162 will be needed to make the outlook bearish towards 160, else it may continue to trade within 162-164 region in the near term.

Dollar-Yen (149.97) seems to be falling towards the lower end of its near-term range of 151-149 which is likely to hold for some more sessions, unless a break below 149 is seen which could drag the pair to test 148-146 on the downside eventually.

USDCNY (7.1971) continues to trade near the upper end of its narrow range of 7.18-7.20 and unless a break on the either side of the range is seen, further view remains indecisive.

Aussie (0.6506) recovered from the low of 0.6478 and currently looks stable above the support of 0.65. Still the pair needs to produce a bounce past 0.655 to further test 0.66 on the upside, else the pair getting dragged down towards 0.64 could be seen in the medium term.

Pound (1.2695) failed in its attempt to sustain its rise past the immediate range of 1.26-1.2730 and declined a bit on testing 1.2734 on the upside. Unless a decisive break on the either side of the range is seen, the range may persist for a while.

USDINR (82.8950) tested 82.9275 but could not move up further. We may expect 82.80-83.00 region to hold for some more time.

EURINR (89.9336) is unable to see a strong rise past the crucial level of 90, but while it has sustained above 89.50, it has a fair chance of rising towards 90.5-91 in the coming sessions. Until then the range of 90-89 could hold for some more time.

The US Treasury and the German yields have declined. The Treasury yields have dipped below their supports while the German yields are poised at their key supports. Failure to bounce back from current levels can drag both the Treasury and the German yields further lower from here. That will delay the rise that we have been expecting. The ECB meeting tomorrow will need a close watch. The 10Yr and 5Yr GoI remain stuck inside their narrow range. The bias is negative to break the range on the downside and see a fresh fall.

The US 10Yr (4.16%) and the 30Yr (4.30%) yields have come down. The 10Yr has dipped below 4.2%. While this sustains, a fall to 4.1%-4% can be seen instead of a rise to 4.4%-4.6% that we were expecting. The 30Yr can fall to 4.2%-4.15% if it falls further from here.

The German 10Yr (2.32%) and the 30Yr (2.46%) yields come down further. Failure to rise back from here can drag the yields gradually down to 2.25%-2.2% (10Yr) and 2.35% (30Yr). That would delay the rise to 2.6% (10Yr) and 2.7%-2.8% (30Yr).

Both the 10Yr GoI (7.0567%) and 5Yr GOI (7.0598%) are stuck between 7.04% and 7.08%. The bias is negative. The 10Yr can fall to 7%-6.95% and 6.9%-6.8% while it remains below the 7.10%-7.12% resistance region. The 5Yr can fall to 7% while below 7.1%.

Dow Jones has declined sharply towards 38500 and a break below it, if seen, can drag it further down. Although DAX has scope to see an extended rise but considering the limited upside, we need to remain cautious for a correction rather than being bullish. Nikkei is inching lower but have near term supports, which if hold, can keep alive the chances of rise towards our expected level. Nifty has bounced back a bit yesterday but can dip today due to the sell off in Dow Jones. Shanghai is near its key resistance zone which might halt the current rally and produce a fall soon.

The break below 38750 and the fall to 38500 happened much faster. Dow (38585.19, -1.04%) is now bearish to see 38100-38000 on the downside. A fall below 38000 will give way for a deeper correction to 37000.

DAX (17698.40, -0.10%) seems to be coming down gradually. While above 17500 a test of 17900-18000 is still possible. But considering the limited upside, we prefer to remain cautious for a sharp correction rather than being bullish.

Nifty (22356.30, -0.22%) has bounced from the low of 22269. Nifty can dip to 22100 or 22000 today if the sell-off in the Dow spills over it. A sustained rise above 22400 might be needed for a rise to 22500-22700.

Nikkei (39977.50, -0.30%) is inching lower. However, the support at 39500-39000 can hold and produce a bounce towards 40800-41000.

Shanghai (3040.06, -0.25%) is hovering below 3050. While 3050/3075/3080 resistance holds, a fall back towards 3000 can be seen.

Crude prices continues to dip in line with expectations and look bearish for the near term. Gold and Silver tested their key resistance before coming down from there. While the precious metals holds below their resistance, a dip might be possible in the near term. Copper to remain sideways for a while with a scope to see a break on the downside. Natural Gas has scope to test its immediate resistance before a fall back can be seen.

Brent ($ 82.03) has declined further. Can come down towards $ 80. Overall, a range of $ 85-80 can hold for some time.

WTI ($ 78.11) has come down towards $ 78 and may fall further towards $ 76 or even lower to $ 75-74. Resistance is at $ 82-83 region.

Gold (2133.80) tested 2150.50 yesterday in line with expectations to see a test of key resistance at 2150-2160. While 2150-2160 holds, a fall back towards 2100 might be possible. Only a strong break above 2160, if seen, could open doors towards 2200-2230/2250.

Silver (23.81) rose sharply to test 24.46 in line with expectations for a rise towards 24.50 and has retreated from there. Both 24.50-25 are crucial resistance level, while below which, a dip towards 23.50-23.00 can be seen.

Copper (3.8430) is drifting lower within its 3.90-3.80 range. The sideways range may continue to hold for a while with a scope to see a break on the downside and fall towards 3.75-3.70.

Natural Gas (1.9380) has risen back towards 2.0. A test of 2.1 looks likely before a corrective dip can be seen towards 1.9-1.8.

22:30 04:00 AU PMI
Expn -15.7 …Expected – …Previous -23.8

0:30 06:00 AU GDP
Expn – …Expected 0.3% …Previous 0.2%

10:00 15:30 EU Retail Sales
Expn 0.0% …Expected 0.1% …Previous -1.1%

13:15 18:45 US ADP Emp
Expn – …Expected 145K …Previous 107K

14:00 19:30 BOC Meeting
Expn – …Expected 5.00% …Previous 5.00%

DATA YESTERDAY
—————
5:00 10:30 IN Services PMI
Expn 59.6 …Expected 62.0 …Previous 61.8 …Actual 60.6