The US Dollar shot up after the higher US CPI release and continues to trade higher with the Euro trading just anbove 1.07 post the ECB meeting yesterday where the central bank kept rates unchanged but remained cautious and optimistic for a rate cut in June. EURJPY could test 163.50-163 before bouncing back to 165 while USDJPY can dip from 154 towards now support at 152. Aussie and Pound continue to hold above supports at 0.65 and 1.25 and can move up slowly in the coming days. USDCNY may rise towards 7.24/25 slowly. EURINR could range within 89-91 for a few sessions while USDINR may attempt to test 83.30/40 while above 83.15.

Dollar Index (105.263) shot up sharply above our expected range of 105-103.50 after the US CPI (YoY) came at 3.5% on 10th April. Immediate resistance is seen near 105.70-106 which if holds could bring it back towards 105-104. Otherwise, a break past 106 will be needed to make the outlook further bullish towards 107/108 in the medium term. Watch price action around 105.70-106 for now.

EURUSD (1.0724) continued to trade lower after the US CPI release and after the ECB meeting yesterday. It tested 1.06992 yesterday before rising slightly to trade above 1.07 for now. If the Euro falls back below 1.0690, it would open up chances of a fall towards 1.0650-1.06 in the medium term. Else, while above 1.0690, we may expect an immediate range of 1.0690-1.09 to hold for a while.

EURJPY (164.11) has been making a lower high over the past 4-sessions but at the same time, it has not been able to break and sustain below 163.90. While below 165, the pair could attempt to test 163.50-163 before again bouncing back towards 165. A range of 163-165 may hold for the next few sessions.

Dollar-Yen (153.04) shot up sharply above the crucial resistance near 152, breaking the multi-year high since 1990, triggered by the strength in the US Dollar post-CPI release. While above 152, medium-term rise to 154/156 could be possible. But we may expect a slight dip or pause near interim resistance near 154 which can take the pair down to 152 again.

USDCNY (7.2352) is gradually rising towards its higher resistance at 7.24 and unless a decisive break past 7.24 is seen, we expect the pair to move within the broad region of 7.24-7.22 for a while.

Aussie (0.6542) and Pound (1.2558) came down significantly on Friday but have held above supports near 0.65 and 1.25 respectively. While the supports hold, a short rise to 0.655-0.66 and 1.26-1.2650 could be seen in the coming sessions.

USDINR (83.19) has shot up on the offshore markets quoting above 83.30 so we may expect a gap up opening today on the OTC markets which may put into question our earlier view of seeing a fall to 83.10/05. Immediate low for USDINR could be limited to 83.15 with a possible rise back towards 83.30/40 on the upside.

EURINR (89.3942) has also fallen sharply over the last 3-sessions, breaking slightly below our expected range of 89.50-91.00 but now, a break below 89 will be necessarily needed for it to drag further towards 88 or lower. Until then, a broad range of 89-91 is expected to hold in the near term.

The US Treasury yields have surged after the US CPI inflation data release on Wednesday. The 10Yr Treasury yield is coming close to its key resistance while the 30Yr has room to rise further. The US Headline CPI rose 3.48% (YoY) in March, up from 3.17% rise seen in February. We will have to wait and watch. The German yields have also moved up. The 10Yr yield has just broken its range on the upside and needs to see if a strong follow-through rise is happening or not. The 30Yr German yield is poised at the upper end of its range. The European Central Bank had left its policy rates unchanged yesterday. The 10Yr GoI has dipped but has support to limit the downside. The view is bullish while this supports hold. The 5Yr GoI on the other hand has come back into its range failing to sustain the break. We will have to wait and watch what is happening.

The US 10Yr (4.56%) and the 30Yr (4.66%) yields have surged after the inflation data release on Wednesday. The 10Yr is coming close towards 4.6% as expected. The price action thereafter will need a watch to see if a reversal is happening or not. The 30Yr has risen above 4.6% and while this sustains there is room to test 4.8%.

The German 10Yr (2.46%) and the 30Yr (2.58%) yields have risen well. The 10Yr has just broken the 2.2%-2.45% range. Need to see if this is sustaining to take it up to 2.6%. The 30Yr is at the upper end of its 2.4%-2.6% (30Yr) range. We will have to wait and watch if a breakout is happening or not.

The 10Yr GoI (7.1112%) has come down but can get support at 7.10%-7.08%. While this support holds, the upside is open to test 7.15%-7.2% and even 7.3%, but with intermediate corrective dips.

The 5Yr GOI (7.0901%) has come down failing to sustain the break above 7.12%. For now, the sideways range is intact. A sustained rise above 7.12% is needed to go up to 7.2%-7.25% and higher.

Dow Jones continues to dip and remain bearish for the near term. DAX has fallen sharply. Failure to hold above 17800-17700 could be vulnerable to a further fall in the coming sessions. Nifty might also come down taking cues from global equities. Nikkei looks ranged. Shanghai has bounced as the support at 3000 has held well as expected. It may trade sideways above 3000 for a while.

Dow (38459.08, -0.01%) is looking weak to test 38000-37900. A break below 37900 can accelerate the sell-off and drag it down to 37200-37000. Resistance is now around 38700 and 39000-39100.

DAX (17954.48, -0.79%) has dipped below 18000. Crucial level to watch will be 17800-17700 which has to hold to keep the uptrend intact. A break below 17700 will indicate a trend reversal. We will have to wait and watch.

Nifty (22753.80) might come down taking cues from global equities. But it has to decline below 22500 to come under pressure for a fall to 22200. While above 22500, the upside is open to test 23000.

Nikkei (39678.00, +0.59%) looks ranged within 39000-40000. A decisive break on either side of the range will determine if it will rise towards 41000 or falls towards 38000.

Shanghai (3035.8376, +0.06%) bounced back as the support at 3000 has held well. While above 3000, a broad range of 3000-3100 may hold for a while.

Brent and WTI are holding well above the mentioned support at $ 88.50 and $ 84 and remain range bound. We will wait for a range breakout to determine the next direction. Gold and Silver have scope to rise towards their key resistance before a corrective fall can be seen. Copper has fallen back and might come down towards 4.17 before a bounce back is possible. Natural Gas has come down sharply but downside might be limited to 1.7-1.5.

Brent ($ 90.48) keeps consolidating within $ 91-88.50. A break on either side of the range is needed to determine if it will rise towards $ 92-92.50 or falls towards $ 87.50.

WTI ($ 85.82) remains ranged within $ 88-84. A break on either side of the range will deicide if it will rise towards $ 90 or falls towards $ 82.

Gold (2402.60) is heading up towards 2415 as expected. The rally might extend upto 2420-2425. Thereafter, a corrective fall can be seen towards 2350-2300.

Silver (28.76) continues to rise. It has scope to test 29.00-29.50 before a corrective dip can be seen towards 28.

Copper (4.2705) has fallen back from 4.3350 contrary to our view to see a rise towards 4.40. It may come down to 4.17 and then bounce towards 4.25-4.30.

Natural Gas (1.7570) has fallen back sharply after testing 1.9430. We had expected to see a rise towards 2.00. Support is at 1.7 and then lower at 1.5. While above these, we can expect a broad range of 1.5/1.7-2.00 to hold for some time.

6:00 11:30 UK Trade Bal
Expn -14.00 …Expected -14.50 …Previous -14.50

12:00 17:30 IN IIP
Expn 5.8 …Expected 6.0 …Previous 3.8

12:00 17:30 IN CPI
Expn 5.25% …Expected 4.90% …Previous 5.09%