Dollar Index trades higher along with a weaker Yen on concerns of intervention from the BOJ. Japan’s finance minister said has said that he would not rule out any measures to cope with the weakening currency. USDJPY is almost at the 152 barrier and a break or dip from here would be crucial driver of medium term direction. Overall major currencies have declined against the Dollar giving up slight gains seen yesterday. Aussie and Pound have fallen back to head towards support at 0.65 and 1.26/2590 respectively. Yuan has weakened again towards 7.23. Euro is down towards 1.08. USDINR may open around 83.30 but could attempt to rise to 83.40 with downside limited to 83.25/20. Crucial data releases this week would be US GDP and US PCE inflation that could keep the Dollar volatile till the end of the week.

Dollar Index (104.38) tested 104 yesterday but bounced back from there to trade higher currently. A break above 104.50 could take it to 105 before topping out for the near term.

EURUSD (1.084326) tested 1.0864 but could not sustain the rise and has instead dipped to current levels. We may expect 1.08 to hold in the near term failure of which can open chances of a dip to 1.0750 before showing a medium term reversal.

EURJPY (164.32) and Dollar-Yen (151.94) have moved up again after a short pause over the last 2-sessions. EURJPY could be headed towards 164.50-165 but USDJPY is headed towards crucial long term resistance at 152 which if breaks could signal a fresh rally for the medium term towards 154. The pair if holds and reverses from 152 would decline back to 151-150 in the coming weeks. Watch price action at 152 which is very crucial.

USDCNY (7.2275) has moved up sharply but could face rejection from resistance near 7.23. Failure to pause at 7.23 could take it higher to upper resistance at 7.2375.

Aussie (0.6513) and Pound (1.2613) moved up to 0.6559 and 1.26679 yesterday but could not sustain higher and instead declined back on Dollar strength. Both should hold above respective supports near 0.65 and 1.26/2590 to bounce back in the next few sessions.

USDINR (83.2850) came down a bit as expected yesterday but could the rise in Dollar and USDCNY and dip in Euro put upside pressure on the USDINR today? We may expect the pair to open around 83.30 but could attempt to move up towards 83.35/40 with downside limited to 83.25/20 over the next 2-sessions.

EURINR (90.2412) has dipped from 90.50 and could be headed towards 90. Immediate range of 90-90.50 and broad range of 91-89 may hold for now.

The US Treasury and the German yields have dipped. Failure to rise back immediately from here can drag the Treasury yields further lower this week. The German yields on the other hand have support while above which the view is bullish to see more rise going forward. The 10Yr is hovering around a key resistance which has to be broken to move higher and avoid a fall back. The 5Yr GoI looks relatively more bullish than the 10Yr. It can move up if a strong follow-through rise happens from here.

The US 10Yr (4.23%) and the 30Yr (4.39%) yields have dipped further. A fall below 4.2% (10Yr) can take it down to 4%. That will reduce the chances of the rise to 4.4%. The 30Yr has to sustain above 4.35% to avoid a fall to 4.2% and negate the rise to 4.6% from here.

The German 10Yr (2.35%) and the 30Yr (2.50%) yields have dipped. But supports are at 2.3% (10Yr) and 2.4% (30Yr) while above which the bullish view of the rise to 2.6% (10Yr) and 2.7%-2.8% (30Yr) will remain intact. Deeper supports are at 2.2% (10Yr) and 2.35% (30Yr).

The 10Yr GoI (7.0908%) is stuck between 7.04% and 7.1% now. Unless a sustained rise above 7.1%, the fall to 7%-6.9% cannot be avoided. 7.15% can be targeted if 7.1% is broken decisively.

The 5Yr GOI (7.1079%) is holding above 7.1%. A strong follow-through rise above 7.12% will be bullish to see 7.3% and higher levels. IT will then negate the fall to 7% and lower.

Dow Jones and Shanghai remain lower but have key near term supports which may hold and lead to a bounce. DAX has entered into its key resistance zone which could halt the current rally and produces a fall back. Nifty looks ranged.

Dow (39282.33, -0.08%) remains lower but can get support in the 39150-39000 region. A bounce back there after can take it up to 40000 and higher.

DAX (18384.35, +0.67%) is heading up towards 18500 in line with our expectation. The price action thereafter will need a close watch for a corrective fall.

Nifty (22004.70, -0.42%) is stuck in a narrow range around 22000. The key levels to watch are 21700 and 22250. A breakout on either side of these levels will decide whether Nifty can rise to 22500 or fall to 21500.

Nikkei (40890, +0.98%) has bounced from a low of 40280.85. Bias remains positive for a rise towards 41700-42000 while above 40000. Thereafter, a corrective dip might be seen towards 41000.

Shanghai (3015.65, -0.52%) remains subdued. Support is at 3000. While that holds, a bounce back towards 3050-3100 could be seen. Only a break lower, if seen, can drag thee index down to 2950.

Most of the commodities have fallen. Crude prices have fallen back and looks bearish to test their immediate support before a bounce back can happen. Gold looks range bound. Silver, Copper and Natural Gas have scope to fall towards their support.

Brent ($ 84.85) has declined below $ 85. A fall towards $ 83.00 could be seen. Thereafter, a bounce back is possible towards $ 85-86.

WTI ($ 80.83) has fallen back below $ 81 and is heading down towards $ 80.50. It may test $ 80-79.50 before a bounce back can happen towards $ 82. Overall, a range of $ 79.50/80-$ 84 may hold for some time.

Gold (2177.90) rose to 2200.60 yesterday in line with expectations for a rise towards 2200-2225 before coming off from there. We expect a range of 2200/2225-2150 to hold for some time.

Silver (24.49) traded within 25.10-24.50 range yesterday before breaking on the downside in line with expectations. View remains bearish for a fall towards 24.00 in the near term.

Copper (3.9890) has fallen below 4.00 contrary to our view for a rise towards 4.05-4.10. It can test 3.95-3.93 on the downside. After that, a bounce back could be seen towards 4.00.

Natural Gas (1.77) lacks strength to rise above 1.8. It can test 1.75-1.70 before a bounce back can be seen towards 1.9-2.0.

9:00 14:30 EU Biz Climate
Expn 97.9 …Expected – …Previous 95.4

DATA YESTERDAY
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12:30 18:00 US Durable Goods Orders
Expn 0.6% …Expected 1.2% …Previous -6.9% …Actual 1.4%

13:00 18:30 US Case Schiller
Expn 6.4% …Expected 6.6% …Previous 4.8% …Actual 6.6%

14:00 19:30 US Cons Conf
Expn 107.7 …Expected 106.9 …Previous 104.8 …Actual 104.7