The US Dollar continues to trade higher but could pause near 106.20 while the Euro is headed towards 1.06 from where a short bounce can be possible. EURJPY could trade within the 165-162 region while USDJPY could face interim resistance at 154. Aussie and Pound continue to hold above supports at 0.6450/64 and 1.24 and can move up slowly in the coming days. USDCNY may rise towards 7.24 from where an interim dip is possible. EURINR could range between 88-89.50 for a few sessions. We watch price action near 83.50 on USDINR to see if it breaks on the upside or dips back towards 83.30/20, keeping a near-term range of 83.20-83.50 intact.

Dollar Index (105.977) extended its rally to 106.10. A dip from current levels can take it down to 105.50 before attempting a rise back towards 106/107 on the upside. The view is bullish while above 105.

EURUSD (1.0649) plunged to levels much below 1.07. There could be an interim bounce from 1.06 towards 1.07 but in the medium term, we may have to allow for a decline towards 1.05.

EURJPY (163.68)has managed to bounce back from 162.27, holding above support at 162. An immediate range of 162-165 may hold for the next few sessions.

Dollar-Yen (153.70) is headed towards resistance near 154 which could produce a temporary dip to 152. Later, in the medium term, we may expect a rise towards 155/156 on a beak above 154.The overall view is bullish above 152.

USDCNY (7.2377) has moved up slightly and could test 7.24. Thereafter, a sustained break above 7.24 is needed for further bullishness, or else the pair can come down towards 7.23/22.

Aussie (0.6477) is likely to limit its near-term fall to 0.6440-0.64 with an upside possibility of 0.65/66 intact for the medium term.

Pound (1.2461) has immediate support at 1.24 which may hold in the near term and produce a bounce towards 1.25/2550 in the next few sessions.

USDINR (83.4175) trades below 83.50. We continue to remain cautious and to see RBI action near 83.50 for a fall towards 83.30-20 which could keep the currency pair ranged within 83.50-83.20 for some time. Although the movement seen in the last 2-sessions may prompt a possible rise above 83.50, we would wait for a confirmation to turn our sentiments bullish.

EURINR (88.9087) may limit its near term fall to 88.50/88.00 and bounce back towards 89/89.50 in the near term.

The US Treasury yields have dipped slightly. They have to get a strong follow-through rise from here to move higher. Else the yields can fall back. The German yields have declined sharply from the upper end of their respective range. The sideways range remains intact, and the yields might fall within it now. The 10Yr and 5Yr GoI surged on Friday. The outlook is now bullish. More rise is on the cards.

The US 10Yr (4.52%) and the 30Yr (4.63%) yields have dipped slightly. The 10Yr has to breach 4.6% to move further up towards 4.75%-4.8%. Else it can fall back to 4.4% and lower. The 30Yr on the other hand has to sustain above 4.6% to keep alive the chances of seeing 4.8% on the upside. Else a dip to 4.5%-4.45% can be seen. It is a wait and watch.

The German 10Yr (2.36%) and the 30Yr (2.50%) yields have declined sharply. The 10Yr has failed to sustain the break above 2.45% and is back into its 2.2%-2.45% range. The 30Yr has turned down from near the upper end of its 2.4%-2.6% range. So, overall, the sideways range is still intact.

The 10Yr GoI (7.1794%) and the 5Yr GOI (7.1636%) have surged on Friday. The 10Yr is heading up towards 7.2% and can extend the upside to 7.3% as well. The 5Yr has breached 7.12% and can target 7.3% and even 7.4% over the medium-term.

Dow Jones, DAX and Nikkei looks bearish for the near term. Nifty might break below its support of 22500 taking cues from sell off in global equities. Shanghai to trade sideways within 3000-3100 for a while.

Dow (37983.24, -1.24%) has tested 38000 as expected. The outlook is bearish to see 37200-37000. Resistance will now be around 38500.

DAX (17930.32, -0.13%) looks vulnerable for fall to 17600-17500 while it remains below 18000.

Nifty (22519.40, -1.03%) declined sharply on Friday and is poised just above the key 22500 level. The global equity weakens can drag it below 22500 towards 22200 and even 22000 this week. The price action thereafter will need a close watch to see if the Nifty is reversing higher again or not.

Nikkei (39058.50, -1.29%) is attempting to break below the lower end of the 40000-39000 range. It may come down towards 38000.

Shanghai (3059.11, +1.31%) looks ranged within 3000-3100. Only a decisive break lower, if seen, can drag it down to 2950.

Strong US CPI data, Hawkish FED comments on Friday that they were in no hurry to cut interest rate and Middle East tensions have led to volatility in commodity market. Brent can rise while it remains above the support at $ 89.50. WTI looks ranged. Gold, Silver and Copper rose sharply on Friday before falling back. Metals might fall further in the near term. Natural Gas is to trade sideways within a range of 1.5/1.7-2.00.

Brent ($ 90.24) rose to $ 92.18 last friday and has dipped from there. Immediate support is at $ 89.50. While that holds, a bounce towards 92.50-92.65 could be seen.

WTI ($ 85.34) remains ranged within $ 88-84.

Gold (2371.80) rose to test 2448.80 last Friday well above our expected level of 2420-2425 and has come down sharply below 2400 from there. It may dip towards 2350-2300 in the near term.

Silver (28.32) tested 29.91 last friday well above our expected level of 29.50 and has come down sharply from there. It may dip towards 27-26.50 while it remains below 29.50-30.00.

Copper (4.3075) did not fall towards 4.17 and instead rose to 4.40 last friday and has fallen back sharply from there. It may dip towards 4.20.

Natural Gas (1.7610) has managed to sustain above 1.70. Lower support is seen at 1.50. We expect a broad range of 1.5/1.7-2.00 to hold for some time.

6:30 12:00 IN WPI
Expn 0.15% …Expected 0.51% …Previous 0.20%

9:00 14:30 EU Ind Prodn (MoM)
Expn 1.3% …Expected 0.8% …Previous -3.2%

12:30 18:00 US Retail Sales (MoM)
Expn -0.4% …Expected 0.4% …Previous 0.6%

Data Friday
…………
6:00 11:30 UK Trade Bal
Expn -14.00 …Expected -14.50 …Previous -14.1 …Actual -14.2

12:00 17:30 IN IIP
Expn 5.8 …Expected 6.0 …Previous 4.1 …Actual 5.7

12:00 17:30 IN CPI
Expn 5.25% …Expected 4.90% …Previous 5.09% …Actual 4.85%