The dollar Index bounced back from 104.34 after the US Consumer confidence data was released higher than expected. A rise towards 105 or higher looks possible in the near term. The Euro has fallen from levels below 1.09 and could sustain within 1.08-1.09 for a while. EURJPY looks bullish towards 171/172 while USDJPY has risen above 157 and seems to be slowly moving up. USDCNY is bullish towards 7.25/26. Aussie and Pound have dipped from 0.6680 and 1.28 respectively and can come off in the near term towards 0.66 and 1.27/26. EURINR has dipped and can test 90 before moving back to 91. USDINR above 83, has the potential to rise back towards 83.35/40 in the near term.

Dollar Index (104.696) bounced back from 104.34 after a higher than-expected US Consumer confidence data released yesterday, preventing a further dip in the Dollar Index to 104. Now, while above 104.50, a rise past 105 to test 106-106.50 could be possible.

EURUSD (1.0846) tested 1.0889 yesterday, slightly below our target of 1.09 before coming down. Further decline can take it towards 1.08. Thereafter, if the support holds, a narrow range of 1.08-1.09 can persist for a while. Overall movement within the broad 1.0750-1.0950 is likely to hold for some time.

While Dollar-Yen (157.29) has finally risen above 157 and now if sustained; can head towards 159-160 on the upside, EURJPY (170.61) has been inching up towards our next target of 171.50-172.

USDCNY (7.2475) has been slowly inching up towards 7.25. We retain our bullish target of 7.25/26 for the medium term.

Aussie (0.6654) dipped from 0.6680 while Pound (1.2753) tested expected resistance at 1.28 before coming off. While Pound looks bearish towards 1.27/26, Aussie may trade between 0.66-0.67 region for some more time before declining towards 0.65/64 in the longer run.

USDINR (83.1825) has recovered well from its immediate support at 83 and while it sustains, a potential rise to 83.35-83.40 could be seen in the near term.

EURINR (90.2623) rose to the level of 90.5751 before cooling down a bit. While the pair stays above 90, outlook remains bullish towards 91 in the near term. The downside is expected to be limited to 89.50.

The US Treasury yields have risen well breaking above their resistances. While this break sustains, the yields can rise further in the coming days. The US GDP tomorrow and the US PCE on Friday are important data releases to watch this week. The German yields have also risen back again. The bullish view is intact, and an extended rise can be seen in the coming days. The 10Yr and 5Yr GoI have risen back. They can consolidate in a range for some time and then rise eventually going forward.

The US 10Yr (4.55%) and the 30Yr (4.67%) yields have risen above 4.5% and 4.6% respectively. While this sustains the yields can rise to 4.6% (10Yr) and 4.7%-4.8% (30Yr). The fall 4.2%-4.1% (10Yr) and 4.4%-4.3% (30Yr) stands negated now.

The German 10Yr (2.59%) and the 30Yr (2.71%) yields have risen back again. A rise above 2.6% (10Yr) can take the 10Yr up to 2.8%-2.9% (10Yr). The 30Yr has risen above 2.7% and while this sustains it has potential to target 3%.

The 10Yr GoI (7.0551%) and the 5Yr GOI (7.0347%) have risen well. As expected, 7%-7.1% can be a range for some time. The yields are likely to breach 7.1% eventually and rise to 7.2%-7.3% (10Yr) and 7.2% (5Yr)

Dow Jones has scope to test its key support before a bounce back can be seen. DAX has come down again and looks mixed for the near term. Nifty has dipped further and a break below 22800, if seen, would be vulnerable to a further fall in the near term. Shanghai and Nikkei lacks a follow through rise but bias is positive to see a rally towards 3150-3200 and 40000 while above 3100 and 38000 respectively.

Dow (38852.86, -0.55%) has declined below 39000 as expected. 38500 can be tested and then a bounce back is possible from there. Price action around 38500 will need a close watch.

DAX (18677.87, -0.52%) has come down again. Near-term picture looks mixed, and ranged between 18500 and 18900. While the bias is positive to see a rise to 19200, an intermediate fall to 18400-18200 cannot be completely ruled out before that rise happens.

Nifty (22888.15, -0.19%) came down yesterday. 22800 is a key support which has to hold to keep alive the chances of seeing 23200. A break below it can drag the Nifty down to 22500 and lower. We reiterate to be cautious.

Nikkei (38744.50, -0.30%) struggles to get a follow through rise above 39000. However, bias is positive for a break above 39000 and rise towards 40000 while above 38000.

Shanghai (3117.28, +0.25%) lacks strength to rise above 3130. As long as it holds above 3100, a rise towards 3150-3200 is still possible.

Brent can test its key resistance at $ 85-86 while WTI has already broken above the resistance at $ 80 and might rise further from here. Gold, Silver and Copper looks bullish for the near term. Natural Gas has bounced back and may extend the bounce further while above 2.73.

Brent ($ 81.10) continues to rise. Can test the resistance at $ 85-86. While those holds, we can expect a range of $ 85/86-80 to hold for some time before a fall can be seen towards $ 75.

WTI ($ 80.08) has risen above $ 80. If the break sustains, it can rise further towards $ 82-83.

Gold (2360.10) trades above 2350. A rise towards 2375-2400 is possible while above 2350.

Silver (32.34) trades above 32.00. It can rise further towards 33-34.

Copper (4.8760) trades above 4.80. It can rise towards 5.00 while it stays above 4.75-4.70.

Natural Gas (2.8250) has bounced back from a low of 2.7320 contrary to our view for a fall towards 2.65-2.60. It can rise towards 2.90-3.00 while above 2.73.

No major data release today.

Data Yesterday
…………..
13:00 18:30 US Case Schiller
Expn 6.5% … Expected 7.3% … Previous 7.33% …Actual 7.38%

14:00 19:30 US Cons Conf
Expn 95.0 … Expected 96.1 … Previous 97.50 …Actual 102