The Dollar has gained strength against the other currencies after Jerome Powell said that they are in no rush to cut interest rates. This led to the Dollar Index rising sharply past 105 heading towards 105.50-106 and the Euro falling towards 1.07 on the downside. USDJPY continues to remain stable within the 151–152 region, EURJPY has dipped below 163 and could further test support at 162 before bouncing back. Aussie and Pound have broken below their expected supports of 0.65 and 1.26. USDCNY has risen sharply past 7.23, but a confirmed break above 7.24 will be needed to make the outlook bullish in the near term. USDINR continues to remain stable below its resistance of 83.50, with the downside limited to 83.25/20. However, we would be cautious of a possible break above 83.50, especially looking at sharp movements in other currencies. The IN Manufacturing data release would be important to watch today. EURINR has dipped below 90, but a broad range of 89–91 may hold for some time.

Dollar Index (105.048) gained significant strength, and the EURUSD (1.0730) came down sharply contrary to our expectations after Federal Reserve Chair Jerome Powell said there is no need to rush an interest rate cut as economic growth remains strong and inflation is above target. Now, a test of 105.50/106 and 1.07 looks likely in the coming sessions before any reversals are seen in the medium term.

EURJPY (162.82) has dipped below 163, but an interim support can be seen around 162, which can hold in the near term and could take it higher again eventually. Meanwhile, Dollar-Yen (151.69) continues to remain stable within the 151–152 region. USDJPY needs to necessarily break past the crucial barrier at 152 to signal a fresh rally for the medium term towards 154. Else a sharp fall below 151-150 is needed in the medium term to confirm a reversal.

We had expected USDCNY (7.2340) to fall towards 7.21/20 while below 7.23, but instead the pair rose sharply above it. Here on, a strong break past 7.24 will be necessarily needed for the pair to maintain bullishness in its trend; otherwise, the possibility of it coming down towards 7.21/20 while below 7.24 cannot be ruled out.

Aussie (0.6496) and Pound (1.2546) have broken below their expected supports at 0.65 and 1.26/2580. If the fall continues, both may get dragged towards 0.64 and 1.25 respectively, before possibly halting.

USDINR (83.4050) will open its first session for the week and the new financial year today after trading holiday since Friday (29th Mar 24). There could be chances that the pair opens higher near 83.50 but it would be crucial to see if it can move up further or come down from there towards 83.30/20. For now, we may expect the resistance at 83.50 to hold but we remain cautious looking at sharp movements in the other currencies.

EURINR (89.5102) has broken below the level of 90 and is nearing the lower end of its broader range of 91–89, which may hold for the near term.

The US Treasury yields have risen sharply. The Fed Chairman Powell saying that the central bank will not be in a hurry to cut interest rates as the economy is strong has triggered this rise. Key resistances are ahead which if broken can see an extended rise in the Treasury yields. The German yields have been oscillating in a sideways range for some time. The bias is positive to break the range on the upside and see a fresh rise. The 10Yr and 5Yr GoI are coming down. They can be in a sideways range for some time before witnessing a fresh fall eventually.

The US 10Yr (4.30%) and the 30Yr (4.45%) yields have risen sharply. The 10Yr can test 4.35%-4.4%. A break above 4.4% if seen can clear the way for 4.6%. Else the 10Yr can fall back and be in the range of 4%-4.4%. The 30Yr can touch 4.55%-4.6%. The price action thereafter will need a watch.

The German 10Yr (2.30%) and the 30Yr (2.45%) yields are flat for some time. They are stuck between 2.2% and 2.45% (10Yr) and 2.4% and 2.6% (30Yr). Bias is positive to break the range on the upside and see a rise to 2.6% (10Yr) and 2.7%-2.8% (30Yr). We will have to wait and see.

The 10Yr GoI (7.0556%) remains lower and can fall to 7%. We can see a range of 7%-7.1% for some time before the yield falls to 6.9%-6.8% eventually over the medium-term.

The 5Yr GOI (7.0487%) can come down within its 7%-7.12% range.

Dow Jones fell sharply after stronger US ISM manufacturing PMI data hinted that FED might delay the rate cut. DAX remains higher but the upside might be capped at 18500-18700. Nifty indeed rallied towards 22500 as expected but needs to break above it for increased bullishness, or else it may fall back. Shanghai has rallied well towards 3090 and might have scope to target further upside.

Dow (39566.85, -0.60%) is coming down and can test 39200 – an important support. The price action thereafter will need a close watch. Resistance is around 39900 which has to be broken for a rise to 40200.

DAX (18492.49, 0.08%) is hovering around its 18500-18700 resistance zone. We expect the upside to be capped at 18700 and a corrective fall to 18200-18000 in the coming days.

Nifty (22462, 0.61%) has risen well yesterday. A sustained rise above 22500 can strengthen the upmove and take it up to 22700 and 23000. Failure to breach 22500 can drag it down to 22200 and lower.

Nikkei (39876, +0.09%) has tested a low of 39706.45 so far in line with expectation for a fall towards 39500. If 39700-39500 holds, a bounce back towards 41000-42000 could be seen.

Shanghai (3072.88, -0.15%) has risen towards 3090 contrary to our view to see a fall towards 2950. Support is at 3020. While that holds, there could be chances of a break above 3090-3100 and rise towards 3150-3200 in the coming days.

Crude prices have scope to test their key immediate resistance in the near term before a corrective dip could be seen. Gold, Silver, and Copper rallied sharply on Monday after the US ISM manufacturing PMI came in at 50.30, higher than expected at 48.50. Metals look bullish to rise further from here. Natural Gas has bounced as support at 1.70-1.68 held well as expected.

Brent ($ 87.71) has risen above $ 87 and might head towards $ 89. If $ 89 holds, a corrective dip to $ 87 can be seen.

WTI ($ 84.03) has scope to test $ 84-85 before a corrective dip could be seen towards $ 82.

Gold (2268.80) moved up to 2286.40 yesterday well above our expected level of 2240. A further rise towards 2300-2400 looks possible.

Silver (25.29) has risen sharply above 25.00 contrary to our view to see a fall towards 24.00. A rise towards 26.00-26.30 could be seen now.

Copper (4.0470) moved up sharply to 4.0780 yesterday. It may rise further towards 4.10-4.15 while it remains above 4.00.

Natural Gas (1.8280) has bounced as the support mentioned at 1.70-1.68 has held well. A rise towards 2.00 looks possible in the near term.

4:30 10:00 RBA Meeting
Expn – …Expected – …Previous 4.35%

5:00 10:30 IN Manufacturing PMI
Expn 57.3 …Expected 59.2 …Previous 56.9

7:30 13:00 CH PMI
Expn 43.5 …Expected – …Previous 44.0

8:00 13:30 EU PMI
Expn – …Expected – …Previous 46.5

8:30 14:00 UK PMI
Expn 48.1 …Expected – …Previous 47.5

DATA YESTERDAY
—————
23:50 05:20 JP Tankan Large Manufacturers
Expn – …Expected 10 …Previous 12 …Actual 11

0:30 06:00 JP PMI
Expn 47.8 …Expected 48.2 …Previous 48.2 …Actual 48.2

1:45 07:15 CN PMI
Expn 51.1 …Expected 51.0 …Previous 50.9 …Actual 51.1

13:30 19:00 CA PMI
Expn – …Expected – …Previous 49.7 …Actual 49.8

14:00 19:30 US Manufacturing ISM
Expn 47.9 …Expected 48.5 …Previous 47.8 …Actual 50.3