Dollar Index needs to break past 105 to become bullish towards 106-106.50, while Euro is testing our target of 1.0820/1.08, from where a reversal towards 1.09 is likely. EURJPY and USDJPY continue to move up targeting 170 and 157/158 respectively while volatility remains low. USDCNY has risen sharply past 7.24 and can now head towards 7.25/26 on the upside. Aussie failed to hold the support at 0.6650 and has declined a bit. If the fall continues, might get extended towards 0.6550 in the coming sessions. Pound is likely to test 1.28 on the upside, while it sustains above 1.27. USDINR is closed today. EURINR can soon test our mentioned target of 90 on the downside.

Dollar Index (104.87) has bounced well from the support around 104.5 and is currently trading near the upper end of its range of 104.50-105 mentioned yesterday. A strong break past 105 is needed to make the outlook bullish towards 106-106.50 in the medium term. Till then, range of 104.50-105 may hold.

EURUSD (1.0827) is falling towards 1.0820-1.08 as expected. Thereafter, if the support holds; a bounce back towards 1.09 or higher can be seen in the medium term.

Dollar-Yen (156.74) and EURJPY (169.73) are nearing our targets of 157-158 and 170 respectively while volatility remains low for now. Our bullish view remains intact for the near term.

USDCNY (7.2434) saw a gap up opening today at 7.2419 and now a rise to resistance near 7.25/26 could be witnessed soon before possibly topping out.

Aussie (0.6622) failed to hold the support around 0.6650 and has broken lower. The current fall might get extended towards 0.66-0.6550 before it reattempts to rise towards 0.67-0.6750 on the upside.

Pound (1.2724) observed a high of 1.2761 before declining a bit. While it holds above 1.27, a potential rise to the mentioned target of 1.28 can be seen. Thereafter, a corrective fall towards 1.26/24 could be witnessed if the resistance at 1.28 holds in the medium term.

USDINR (83.2850) bounced back to 83.2850 from a low of 83.2150 yesterday. Downside could be capped at 83.20/15 from where a bounce back to 83.40/50 is possible in the next few sessions. Today the pair is closed for Buddha Purnima.

EURINR (90.1782) is nearing our mentioned target of 90 and thereafter a bounce towards 91-92 could be witnessed in the medium term.

The US Treasury yields remain stable. While they trade below their resistances a further fall is possible in the coming days. The resistances have to be broken to negate this fall and move up going forward. The German yields have bounced back again. The bullish view is intact. The yields can rise further from here. The 10Yr and 5Yr GoI have declined sharply after the RBI’s dividend announcement to the government yesterday. But key supports are coming up which are likely to hold. A sideways consolidation is possible for some time before the yields rise again.

The US 10Yr (4.42%) and the 30Yr (4.54%) yields remain stable. We repeat that while below the resistances at 4.5% (10Yr) and 4.6% (30Yr) the yields can still fall to 4.2%-4.1% (10Yr) and 4.4%-4.3% (30Yr). The resistances have to be broken for the rise to 4.6% (10Yr) and 4.7%-4.8% (30Yr) to happen.

The German 10Yr (2.53%) and the 30Yr (2.67%) yields have bounced back again. The bullish view of seeing a rise to 2.6% (10Yr) and 2.7% (30Yr) remains intact.

The 10Yr GoI (7.0371%) and the 5Yr GOI (7.0266%) have declined sharply and are heading down towards 7% in line with our expectation. As mentioned yesterday, a 7%-7.1% range can be a possibility for some time before the yields rise back to 7.2%-7.3% (10Yr) and 7.2% (5Yr).

Dow Jones and DAX have fallen on hawkish FOMC minutes. Minutes stated that FOMC members discussed holding interest rates steady for longer if inflation doesn’t fall and expressed their willingness to tighten policy further if needed. Nifty continues to rally and has scope to rise towards its key resistance at 22800. Nikkei has bounced back as the mentioned support has held well and keeps our bullish view intact. Shanghai has fallen back but the downside could be limited to 3100.

Dow (39671.04, -0.51%) has declined below 39780. The corrective fall to 39500 and even 39200-39000 looks possible now.

DAX (18680.20, -0.25%) is at the lower end of its 18600-18900 range. We retain our positive bias to break 18900 and rise to 19200-19300. In case a break below 18600 is seen, the DAX can fall to 18400.

Nifty (22597.80, +0.31%) continues to move up. Our near-term bullish view of a rise to 22800 remains intact. As mentioned yesterday, the price action around 22800 will need a watch to see if a turnaround is happening to keep the 21800-22800 range intact.

Nikkei (38924.50, +0.81%) has bounced back as the support at 38500 has held well. While above 38500-38000, the chances of a rise towards 40000 or even 41000 will remain intact.

Shanghai (3131.77, -0.85%) has fallen back below 3150. As long as it holds above 3100, a test of key resistance at 3200 cannot be ruled out. After that, a corrective fall can happen towards 3150-3100.

Most of the commodities have fallen on Hawkish FOMC Minutes of the meeting except for Natural Gas which has seen a strong recovery. Crude remains bearish for the near term. Metals have supports coming up from where a bounce back is expected to be seen. Natural Gas has scope to test its key resistance before a corrective fall can happen.

Brent ($ 81.46) continues to dip. Can fall towards $ 80-75 while below the resistance at $ 85-86.

WTI ($ 77.06) has declined further below $ 77. Can fall towards $ 75-70 while below $ 80.

Gold (2375) has fallen below 2400 contrary to our view that it will hold and lead to a rise towards 2500. Immediate support is seen at 2360-2350. While that holds, a bounce back towards 2450-2500 is possible. A decisive break below 2350, if seen, can drag it down to 2300-2250.

Silver (30.70) has fallen sharply below 31 contrary to our view that 31 will hold and take it higher towards 33-34. Immediate support is at 30.20-30.00. While 30.00 holds, a bounce back towards 32-33 can be seen again. Only a break lower, if seen, would be vulnerable to a further fall to 29.

Copper (4.8020) has tumbled below 5.00 contrary to our view for a rise towards 5.40-5.45. Key immediate support is at 4.7. While that holds, a bounce back towards 5.00 or higher can be seen. A decisive break below 4.7, if seen, would turn out to be highly bearish for a fall towards 4.5-4.4.

Natural Gas (2.7850) bounced back sharply after testing 2.6090. We had expected to see a test of 2.55-2.50 and then a bounce back from there. The test of key resistance at 3.00 remains intact. After that, a corrective fall to 2.8 looks possible.

14:00 19:30 US New Home Sales
Expn 724K … Expected 674K … Previous 693K

Data Yesterday
…………..
6:00 11:30 UK CPI Y/Y
Expn 2.9% … Expected 2.1% … Previous 3.2% …Actual 2.4%

14:00 19:30 US Existing Home Sales
Expn 4140K … Expected 4210K … Previous 4190K …Actual 4140K