The Dollar Index post weaker US ISM Manufacturing data release fell sharply to test 104 and now it needs to be seen whether the fall gets extended to 103 or not. Euro on the other hand shot up even past our expected resistance near 1.09 and now if sustained, can head towards 1.10 in the coming sessions. EURJPY needs to sustain above 170 to test 172 and USDJPY above 156 can trade within the range of 156-158 for a while. USDCNY above 7.24, has the potential to test 7.25/26 in the medium term. Aussie and Pound tested 0.67 and 1.28 respectively as expected and if sustained, can further test 0.6730/50 and 1.2850 respectively before topping out. EURINR can hold the range of 89.50/90-91 for a while. USDINR had slipped yesterday below 83 but is currently back within our expected range of 83.00-83.60. The pair can remain volatile within this week with possible Rupee strength today. Watch for Lok Sabha Election results today.

Lower US ISM Manufacturing Index from 49.2 (prev) to 48.7 led Dollar Index (104.088) to test 104 on the downside. Now, if the fall gets extended, we expect the downside to be limited to 103. Watch price action closely around current levels.

EURUSD (1.0906) saw a sharp rise yesterday, even past our expected resistance around 1.0890-1.09 due to the Dollar weakness post weaker US ISM Manufacturing data release. Going ahead, there is enough room in the charts to test 1.10 on the upside before possibly topping out.

Dollar-Yen (156.34) came down significantly along with the Dollar Index. Currently it is holding well above its immediate support at 156 and is likely to rise back towards 158 on the upside. Overall, a range of 156-158 is likely to hold in the near term.

EURJPY (170.52) is holding well above 170 but still a strong break past 171 will be needed to make the outlook bullish towards 172 in the near term.

USDCNY (7.2457) above 7.24, looks bullish to 7.25/26 in the medium term.

Aussie (0.6680) tested 0.6699 as expected and if sustained, can extend its rise towards 0.6730/50 in the coming sessions before topping out. Thereafter, if the resistance holds; a corrective fall to 0.6550-0.65 or even 0.64 could be witnessed in the medium term.

Pound (1.2807) indeed tested 1.28 and has even risen slightly above it. A test to higher resistance at 1.2850 could be seen if it sustains above 1.28. Watch price action closely around 1.28 because a false break can bring it back within its narrow range of 1.26-1.28 and a broad range of 1.24-1.28.

USDINR (83.1475) saw a gap down opening at 83.0990 yesterday and it had even slipped below our lower end of the expected range of 83.00-83.50 to test 82.9450. Currently it has recovered well from there and is back within our previously mentioned range. Volatility could be expected today as Lok Sabha Election results are due today. Strength in the equity markets, if seen can strengthen the Rupee against the Dollar today.

EURINR (90.6686) continues to remain volatile within its range of 89.50/90-91 and unless a decisive break past 91 is seen, the range is likely to hold for a while.

The US Treasury yields are coming down in line with our expectation. The outlook is weak, and more fall is on the cards. The German yields have also declined sharply. However, support is there to limit the downside and keep the broader uptrend intact. The 10Yr and 5Yr have come down sharply. They might see an extended fall slightly beyond our expected levels and then see a bounce back again.

The US 10Yr (4.41%) and the 30Yr (4.55%) have come down further in line with our expectation. The 10Yr can extend the fall to 4.3% on a break below 4.4%. The 30Yr can touch 4.5%-4.45%.

The German 10Yr (2.58%) and the 30Yr (2.71%) yields have come down sharply. Support is at 2.55% (10Yr) and 2.65% (30Yr). While they hold, the uptrend will remain intact to see a rise to 2.8%-2.9% (10Yr) and 3% (30Yr).

The 10Yr GoI (7.0023%) and the 5Yr GOI (7.0195%) have come down sharply. A test of 6.95% looks likely (contrary to our view of seeing a bounce from 7% itself) before a bounce back above 7% happens. We will have to wait and watch.

Dow Jones can rise towards 39000 while above 38000-37800. DAX outlook is bullish while above 18400-18200. Nifty can rise towards 23600-23700 while it sustains above 23000 but we have to caution for any profit taking after the actual election results come today. Nikkei has dipped, failing to rise past 39000 and might trade within 39000-38000 for a while before an upside breakout is seen. Shanghai is coming down towards its key support which is expected to hold and produce a bounce back from there.

Dow (38571.03, -0.3%) had bounced from the low of 38247 before closing slightly lower. The 38000-37800 support zone continues to hold well. So, a strong rise above 39000 will negate the fall to 37300-37200 and take the Dow up to 40000 again.

DAX (18608.16, +0.6%) is sustaining well above 18400 itself and has bounced back. Lower support is at 18200. So, while above these supports the outlook is bullish to see 19000 and higher levels.

Nifty (23263.90, +3.25%) can test 23600-23700 while above 23000. But as mentioned yesterday, we have to be cautious for a reversal on the back of profit booking after the actual election results come today. This is a possibility that cannot be completely ruled out although the sentiment is looking positive now.

Nikkei (38734.50, -0.53%) has dipped failing to rise past 39000. As mentioned yesterday, a decisive break above 39000 is needed to rise towards 40000 or higher. Else it may trade within 39000-38000 for a while before an upside breakout can be seen.

Shanghai (3072.31, -0.20%) is gradually falling towards the support at 3050. While 3050 holds, a bounce back towards 3130-3150 can be seen. Overall a range of 3050-3200 can hold for some time.

Crude prices have tumbled on the release of weaker US ISM Manufacturing PMI data and have scope to fall towards their key support in the near term before a bounce back can be seen. Gold and Silver to trade sideways between 2300-2400 and 30-33 for a while. Copper has to rise past 4.70 to bring back the bullishness. Else it could fall back towards 4.50. Natural gas has risen well and has scope rise further towards 2.90-3.00.

Brent ($ 77.89) has broken sharply below the lower end of the $ 85-80 range as expected. It can fall further towards $ 75 or max $ 74-73 before a bounce back can be seen towards $ 80-81.

WTI ($ 73.66) has fallen sharply below the lower end of the $ 81-75 range as expected and looks vulnerable to test $ 70. After that, a bounce back can happen towards $ 76-78.

Gold (2369.50) look mixed. It can remain ranged between 2300-2400 for a while.

Silver (30.93) tested a low of 29.94 before bouncing back sharply from there. The support at 30 has held well. While above 30, we can expect a sideways consolidation between 30-32/33 for some time.

Copper (4.6780) has moved up towards the resistance at 4.70. A rise past it is needed to become bullish towards 4.90. Else it can dip towards 4.50-4.45 and then a bounce back can be seen.

Natural Gas (2.7610) has risen towards 2.8 and might move up further towards 2.9 or even 3.0. A range of 2.5-3.0 can hold for some time.

6:30 12:00 CH CPI
Expn 1.3 … Expected – … Previous 1.3

Data Yesterday
…………..

0:30 06:00 JP PMI
Expn 49.9 … Expected 50.5 … Previous 49.6 …Actual 50.4

1:45 07:15 CN PMI
Expn – … Expected 51.6 … Previous 51.4 …Actual 51.7

5:00 10:30 IN Manufacturing PMI
Expn 58.7 … Expected 58.4 … Previous58.8 …Actual 57.5

7:30 13:00 CH PMI
Expn 39.7 … Expected 45.4 … Previous 41.4 …Actual 46.4

8:00 13:30 EU PMI
Expn – … Expected 47.4 … Previous 45.7 …Actual 47.3

8:30 14:00 UK PMI
Expn 49.3 … Expected 51.3 … Previous 49.1 …Actual 51.2

13:30 19:00 CA PMI
Expn – … Expected 50.2 … Previous 49.4 …Actual 49.3

14:00 19:30 US Manufacturing ISM
Expn 50.9 … Expected 49.8 … Previous 49.2 …Actual 48.7