Expected volatility was seen in the FX markets after the US NFP released on Friday, taking the Dollar Index towards 102 and Euro towards 1.10. Now, it must be seen if resistance at 1.10 holds on Euro and support at 102 holds on the Dollar Index for the near term. USDCNY continues to remain indecisive within 7.20-7.18 region while USDJPY and EURJPY have fallen sharply and expect their supports to hold at 160 and 146 respectively. Aussie may dip to 0.6550 before rising back towards 0.67/68. Pound has risen past 1.28 but needs to break past 1.29 to further test 1.30/32 on the upside else can fall to 1.28/2750 before attempting to move up. EURINR tested 90.90 on the upside and unless a break past 91 is seen, it may continue to move within 91-89 region. USDINR tested 82.66 on the NDF. It is to be seen if the pair opens lower on the OTC markets today towards 82.70/65 before moving higher from there.

Dollar Index (102.726) fell sharply to 102.35 on Friday, after higher than expected US NFP data release. Immediate resistance is seen near 103 and interim support is seen at 102. If 103 holds well, we may see further selling soon, taking the index down towards 101 else a break past 103 if seen can take it back to the 103-104 region (less likely).

EURUSD (1.0938) tested 1.0981 before coming down towards current levels. Immediate resistance is seen near 1.10 which could hold for a while with downside possibly limited to 1.0870-1.0850.

EURJPY (160.83) and Dollar-Yen (147.03) have declined sharply on a weaker Dollar over the last few sessions. EURJPY has tested 160.37, just above immediate support near 160 while USDJPY has tested 146.47 which if holds can produce a short bounce in the near term towards 162 and 148 respectively.

USDCNY (7.1911) tested 7.1836 before rising back to current levels but continues to trade within its range of 7.18-7.20. It may continue to move within the sideways range for some more time.

Aussie (0.6566) broke past 0.66 on Friday, tested 0.6668 on the upside before declining from there. Currently it looks like it can dip to 0.6550 in the next few sessions before eventually moving higher towards 0.67/68.

Pound (1.2848) tested 1.2893 on Friday before declining to current levels. It could come down to 1.28/2750 in a corrective dip in the next few sessions before attempting to rise back towards 1.29/30 on the upside in the medium term.

USDINR (82.79) closed at 82.79 on Friday on the OTC markets but has quoted a low of 82.66 on the NDF before bouncing back towards 82.70/75. Today it is to be seen if the pair manages to test 82.70 or lower on the OTC markets or manages to trade above 82.80. There is enough room for a fall to 82.70/65 on the downside for the day.

EURINR (90.5351) tested 90.90 on the upside before declining a bit , in line with our expectations of seeing a rise towards 91. Unless a sustained break past 91 is seen, the pair may continue to trade within 91-89 region for a while.

The US Treasury and the German yields continue to fall. There is room to fall further to test their key supports. Failure to bounce back thereafter can trigger a deeper fall. That will then negate the chances of seeing a rise back. The 10Yr and 5Yr GoI have broken their range on the downside as expected. The downtrend is likely to resume and more fall can be seen in the coming days.

The US 10Yr (4.06%) and the 30Yr (4.24%) yields continue to fall as expected. The 10Yr is heading down towards 4% and the 30Yr to 4.2%-4.15%. A break below 4% (10Yr) and 4.15% (30Yr) will negate the chances of rising back and will trigger a deeper fall.

The German 10Yr (2.26%) and the 30Yr (2.43%) yields have declined further. The yields can now fall to 2.2% (10Yr) and 2.35% (30Yr). A bounce thereafter will still keep alive the chances of the rise to 2.6% (10Yr) and 2.7%-2.8% (30Yr). Else a deeper fall is possible.

The 10Yr GoI (7.0312%) and 5Yr GOI (7.0324%) have broken their 7.04%-7.08% range on the downside. This keeps our bearish view intact of seeing a fall to 7%-6.95% and 6.9%-6.8% on the 10Yr and 7% on the 5Yr.

Dow Jones struggles to rise above 39000 which keeps the danger alive of seeing a fall in the near term. DAX has scope to test 18000-18200 while above 17500. Nifty has scope to test its key immediate resistance ahead before a fall back can be seen. Nikkei tumbled after media report showed that BOJ could end its yield curve control program and negative interest rate policy in its upcoming meeting. Shanghai is hovering below its key resistance zone which if hold can produce a fall from there.

Dow (38722.69, -0.18%) seems to be struggling to rise back above 39000. That leaves the chances high of it falling to 38500 and even 38000.

DAX (17814.51, -0.16%) can rise to 18000-18200 while it remains above 17500.

Nifty (22493.55, +0.09%) can rise to 22700-22800 and even 23000 (if the rise extends beyond 22800) before reversing lower.

Nikkei (38720.50, -2.46%) has tumbled breaking below the support at 39500-39000. If the break sustain, a dip towards 38000 or even 37600/37500 is possible before a pause can be seen.

Shanghai (3048.03, +0.07%) is hovering below the key resistance at 3065 (revised from 3075/3080). If that holds, a fall back towards 3000-2950 could be seen.

Brent and WTI have fallen back but could find support at $ 80 and $ 76/75 respectively. Gold, Silver and Copper have dipped slightly from their last friday high but have key immediate support coming up which may hold and produce a bounce back. Natural Gas has declined but can attempt to rise back while it sustain above 1.80.

Brent ($ 81.40) has fallen back below $ 82 but has key support at $ 80. While that holds, the range of $ 80-85 can continue to hold for some time.

WTI ($ 77.33) has fallen back below $ 78 failing to rise above $ 80. It can come down towards $ 76-75. If $ 75 holds, we can expect a range of $ 75-81 to hold for some time.

Gold (2185.40) rose sharply to test 2203 last friday, breaking above 2160 and has dipped a bit. Support is now at 2160-2150 region. While that holds, a further rise towards 2230 might be possible.

Silver (24.53) rose to 24.86 last friday and has dipped slightly from there. Immediate support is at 24. While that holds, there could be chances of breaking above 25 and rise towards 25.50-26.00.

Copper (3.8930) rose sharply to test 3.95 on last friday, breaking above the upper end of the 3.80-3.90 range and has since come down from there. Immediate support is seen at 3.8650. If that holds, a bounce back towards 3.93-3.95 can be seen again. Only a decisive break below 3.8650 can drag Copper down to 3.80.

Natural Gas (1.8380) fell to 1.7550 after failing to rise past 2.00 contrary to our view to see a test of 2.10. Thereafter, it has bounce back slightly. If it manage to sustain above 1.8, a rise towards 2.0-2.1 can be seen.

23:50 05:20 JP GDP
Expn – …Expected 0.3% …Previous -0.1%

DATA FRIDAY
—————
10:00 15:30 EU GDP
Expn – …Expected 0.0% …Previous 0.0% …Actual 0.0%

13:30 19:00 US NFP
Expn 230K …Expected 190K …Previous 229K …Actual 275K

13:30 19:00 US Unemployment Rate
Expn 3.7% …Expected 3.7% …Previous 3.7% …Actual 3.9%

13:30 19:00 US Avg Hrly Earnings
Expn 0.3 …Expected 0.2 …Previous 0.5 …Actual 0.1

13:30 19:00 US Average Hourly Earnings Production & Non Supervisory Employees
Expn -1.1 …Expected – …Previous 0.4 …Actual 0.2

13:30 19:00 CA Labour Force
Expn – …Expected 21.1K …Previous 37.3K …Actual 40.7K