The higher than anticipated US PPI release at 0.52 led to Dollar Index slipping below 105 and can now further test 104.5 as well. While Euro has risen above 1.08 but a decisive break past 1.085 will be needed to make the outlook bullish further. USDJPY and EURJPY are rising towards 157/158 and 170 respectively as expected. USDCNY tested 7.2379 before coming down and further if the fall continues, can test 7.22 on the downside. Aussie and Pound are trading near the upper end of their respective range of 0.6550-0.6650 and 1.2450-1.26. EURINR has sustained well above 90 and now it can rise further towards 90.50-91 in the coming sessions. USDINR is likely to trade within 83.40-83.55 range in the near term, before eventually rising higher towards 83.60. US CPI and EU Flash GDP data release are important to watch today.

Dollar Index (104.97) has slipped below 105 after the US PPI MoM came higher at 0.52% than the market expectations of 0.30%, contrary to our expectation of seeing a rise towards 105.50-106. If the fall continues, it can get extended towards 104.5 on the downside before it attempts to rise back in the medium term. The immediate view is bearish below 105.50-105.

Our alternate view of EURUSD (1.0823) rising past 1.08 is in action as the pair shot up significantly after the Dollar Index came down post the US PPI release. We are not ruling out the possibility of a fall towards 1.07, unless a decisive break past 1.0850 is seen to maintain the bullishness in the trend.

Dollar-Yen (156.45) and EURJPY (169.33) look stable above 156 and 168 for now and can head towards 157/158 and 170 respectively as expected.

USDCNY (7.2302) seems to have halted the anticipated rise to 7.25 at 7.2379 and if the fall continues below 7.24, the pair can now turn bearish towards 7.2250/2200 or lower in the medium term.

Aussie (0.6639) and Pound (1.2594) are nearing the upper end of their respective range of 0.6550-0.6650 and 1.2450-1.26, but whether it will break past it or not will have to be seen. Watch price action closely around 0.6650 and 1.26 respectively.

USDINR (83.5250) traded within a narrow 2.5paise range of 83.50-83.5250 yesterday. Immediate support is seen at 83.40 above which we may expect trade within 83.40-83.55 in the very near term with a possible upside extension to 83.60.

EURINR (90.3773) has been steadily moving up. A rise towards 90.50/60 or higher to 91 may not be negated in the near-term.

The US Treasury yields are coming down. There is room to fall more from here to test their supports. But thereafter we can expect the yields to rise back again. The US inflation data release today is important to watch. The German yields continue to move up. The bullish view is intact, and the yields can rise further. The 10Yr and 5Yr can fall from here and test their supports. Thereafter they can rise back again.

The US 10Yr (4.44%) and the 30Yr (4.58%) yields are coming down again. The 10Yr can touch 4.4%-4.35%. The 30Yr has dipped below 4.6%. While this sustains, it can fall to 4.5%. Thereafter we can expect the yields to move higher again.

The German 10Yr (2.55%) and the 30Yr (2.68%) yields have risen back again. The bullish view is intact to see 2.6% (10Yr) and 2.7% (30Yr) on the upside. Support is at 2.4% (10Yr) and 2.5% (30Yr).

The 10Yr GoI (7.1067%) is coming down. It looks vulnerable to break 7.1% and fall to 7%. Thereafter it can reverse higher again.

The 5Yr GOI (7.0923%) has dipped below 7.1% and can now fall to 7% after which it can rise back again.

Dow Jones has near-term support while above which the view remains intact for a rise towards its crucial resistance. Dax has dipped further as expected and might extend the fall some more before a bounce back can happen. Nifty is bullish while above 21821-21700. Nikkei is stuck in a narrow range of 38000-39000. Shanghai has scope to test its key resistance at 3200 before a fallback can be seen.

Dow (39558.11, +0.32%) keeps intact our view of seeing 39900-40000 while above 39000. We will have to wait and see if it is reversing lower again from around 40000 or extending the rise to 41000-42000.

DAX (18716.42, -0.14%) has dipped further. It might see a corrective fall to 18500-18400 before resuming the uptrend towards 19100-19200.

Nifty (22217.85, +0.51%) continues to move up. While above 22000, a rise to 22500-22800 looks possible in the near-term. The broader 21800-22800 range remains intact for now. But broadly, the bias would be to sell on rallies rather than buying the dips.

Nikkei (38587.50, +0.71%) is stuck within 38000-39000 range. The fall towards 37600-37000 that we had mentioned earlier may or maynot happen. A break above 39000, if seen, can lead to a rise towards 40000-41000.

Shanghai (3133.90, -0.38%) has dipped below 3150. Immediate support is seen at 3125-3100. While that holds, a test of 3200 looks possible. Thereafter, a corrective fall can be seen towards 3100-3000.

Crude prices have resistance overhead while below which the outlook will remain bearish for the near term. Gold and Silver can still fall it they stays below the resistance at 2375-2400 and 29 respectively. A decisive break above these, if seen, can negate our view and would turn to be highly bullish. It is a wait and watch now. Copper has risen sharply above 4.80 and can now head towards its next crucial resistance which might halt the current rally. Natural Gas remains bullish for the near term. Key economic data to watch today is US CPI.

Brent ($ 83.03) remains ranged within $ 85-82. While below $ 85, it may break below $ 82 and fall towards $ 80-75.

WTI ($ 78.72) is stuck within $ 80-77. Key resistance is at $ 80-81. While that holds, it may break below $ 77.00 and fall towards $ 75-70.

Gold (2363.60) has bounce back above 2350. Resistance is now at 2375-2400. If that holds, a dip towards 2300 could be seen. In the medium term, a fall towards 2250-2200 cannot be ruled out. A break higher, if seen, can negate our view and lead to a rise towards 2450-2500.

Silver (28.78) is consolidating within 28.30-29.00. A break above 29, if seen, would turn to be highly bullish towards 30.50-31.00-31.50. From there it can fall back towards 29. Else it if sustains below 29 now, a dip towards 28-27.50 could be seen.

Copper (4.9880) has risen sharply above the resistance at 4.80. It can now test the crucial resistance at 5.10-5.15 before a corrective dip can be seen towards 4.80.

Natural Gas (2.3370) looks bullish towards 2.50 or even 3.00 in the near term.

9:00 14:30 EU Flash GDP
Expn – … Expected 0.3% … Previous 0.3%

9:00 14:30 EU Ind Prodn (MoM)
Expn -1.0% … Expected -0.3% … Previous 0.8%

9:00 14:30 IN Trade bal
Expn -17.45 … Expected – … Previous -15.60

12:30 18:00 US CPI (MoM)
Expn 0.3 … Expected 0.4 … Previous 0.4

12:30 18:00 US Core CPI (MoM)
Expn 0.4% … Expected 0.3% … Previous 0.4%

12:30 18:00 US Retail Sales (MoM)
Expn 0.9% … Expected 0.4% … Previous 0.8%

20:00 01:30 US TICS (Net foreign purch of long-term Sec)
Expn – … Expected 89.3 … Previous 71.5

Data Yesterday
…………..
6:00 11:30 UK Unemp
Expn 4.5% … Expected 4.3% … Previous 4.2% …Actual 4.3%

6:30 12:00 IN WPI
Expn 0.36% … Expected – … Previous 0.53% …Actual 1.26%

12:30 18:00 US PPI
Expn 0.2% … Expected 0.3% … Previous -0.1% …Actual 0.5%

12:30 18:00 US PPI ex Food & Energy (MoM)
Expn -0.1 … Expected 0.2 … Previous -0.1 …Actual 0.5