Lower US ADP Employment rate led to fall in the Dollar Index towards 104. The Index can trade within 104.50-104 for the next few sessions while Euro is headed towards 1.09 which if breaks on the upside can extend to 1.0930/50 before coming off again within the 1.09-1.08 range. EURJPY and USDJPY looks ranged within 168-170 and 154-156.50 respectively. USDCNY may remain stable below 7.25. Aussie and Pound trade higher but can soon dip if the current rise does not sustain. EURINR fell from 91.20, unable to sustain the rise. While below 91, it can trade within 89.50-91 region. USDINR is likely to sustain trade within 83.20-83.60 region.

Dollar Index (104.07) tested 104.46 yesterday before coming off sharply towards 104 now. The dip seems to be triggered after a lower US ADP Employment data release yesterday. A test of 103.80-103.60 is possible in the next few sessions on a break below 104. The overall immediate range of 104.50-103.60 may hold for the next few sessions.

EURUSD (1.0894) managed to bounce from 1.0854 and is now headed towards 1.09. Watch ECB policy meeting today. The overall range of 1.0950-1.08 may hold in the near term with some chances of an extension to 1.10.

Dollar-Yen (155.49) has been trading between 156.50-154.40 for the last 3-sessions. While the support at 154 holds, the pair can trade in a range of 154-156.50-158 for some time.

EURJPY (169.45) has recovered well from yesterday’s low of 168.41. The immediate range of 168-170 seems to be holding for now. Only a break above 170 will pave the way for 171-172 in the medium term. The downside is expected to be limited to 168-167 for now.

USDCNY (7.2442) has been steady below 7.25 for quite some time and could continue so for the near term. The downside is likely to be limited to 7.24.

Aussie (0.6670) has been ranged within 0.6580-0.6720 since mid-May’24. Unless a strong break past 0.6720 or below 0.6580 is seen, the pair may continue to trade within the mentioned near-term range.

Pound (1.2802) has again risen slightly above 1.28 but needs to sustain above it to test 1.2850. Else, it is likely to fall back within its narrow range of 1.26-1.28.

USDINR (83.3750) dipped slightly towards yesterday’s closing hours to close at 83.3750 from an intra-day high of 83.47. We continue to look for trade within 83.60-83.20/83.00 for the near term unless a decisive breakout is seen.

EURINR (90.8295) indeed rose above 91, tested 91.20 but could not sustain, and is back within its earlier range of 89.50/90-91. The range is likely to hold for some time, while below 91.

The US Treasury yields have come down further and are below their intermediate supports. There is room to fall further from here in the near-term before a reversal is seen. The German yields have also dipped below their intermediate supports. They can also see an extended dip from here before resuming their broader uptrend. The ECB meeting outcome today is important to watch. The 10Yr and 5Yr GoI have declined below 7.1%. They have to sustain above their immediate support to rise back again. Else they can move back into the earlier sideways range again.

The US 10Yr (4.29%) and the 30Yr (4.44%) continues to fall. There is room on the downside to see 4.2%-4.1% (10Yr) and 4.35%-4.25% (30Yr) in the coming days. Thereafter the yields can reverse higher again.

The German 10Yr (2.51%) and the 30Yr (2.65%) yields have dipped further. There can be an extended fall to 2.45%-2.4% (10Yr) and 2.6%-2.55% (30Yr). Thereafter the broader uptrend can resume targeting 2.8%-2.9% (10Yr) and 3% (30Yr) over the medium-term.

The 10Yr GoI (7.0834%) and the 5Yr GOI (7.0732%) have come down below 7.1%. Intermediate support at 7.06% has to hold to take the yields above 7.1%. A fall below it can put the 10Yr and 5Yr back into the 7%-7.1% range. We will have to wait and watch.

Dow Jones is heading up towards 39000 as expected. A rise past 39000 is needed for increased bullishness. DAX broader outlook will remain bullish as long as it holds above 18400-18200. Nifty has recovered well above 22500 and while this sustains, a further rise can be seen in the near term. Nikkei has bounced back towards 39000 and has scope to break above it and rise further while above the support at 38000. Shanghai can rally towards 3150 as long as it holds above 3050.

Dow (38807.33, +0.25%) continues to move up gradually. We repeat that a strong break above 39000 is needed to bring back the chances of revisiting 40000 levels. A reversal from around 39000 can take the Dow down to 38000 again. Wait and watch.

DAX (18575.94, +0.93%) has risen back again. 18400 and 18200 are good supports while above which the outlook is positive to see 19000 and higher levels.

Nifty (22620.35, +3.36%) has risen well above 22500. While this sustains a further rise to 23250-23500 is possible. 22000-21800 will now be a very good support region.

Nikkei (38,805.50, +0.89%) has bounced back towards the upper end of the 38000-39000 range. Bias is positive to see a break on the upside and rise towards 40000 as long as it holds above 38000.

Shanghai (3070.86, +0.18%) is hovering above 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.

Commodities have recovered well. Crude prices has recovered a bit but have resistance ahead, which if holds, can keep our bearish view intact. Gold has moved up towards it upper end of the range. Need to see it it breaks higher or not. Silver has bounced back but needs to rise past 31 to strengthen the bullish momentum. Copper has bounced above 4.60 and while the bounce sustains, a further rise towards 4.7-4.8 can be seen. Natural Gas looks ranged between 2.5-3.0. All eyes are on ECB meeting today where the central bank is expected to deliver a rate cut.

Brent ($ 78.78) has bounced back towards $ 79. Immediate resistance is at $ 80. While that holds, a dip towards $ 75 or $ 74 is still possible and then a bounce back can happen towards $ 82.

WTI ($ 74.52) has risen back above $ 74. It has to rise past $ 76 to avoid the danger of falling towards $ 70 and to rise $ 78-78.50.

Gold (2387.80) has moved up towards the upper end of the 2300-2400 range. A break above 2400, if seen, can target 2450 and then a corrective dip towards 2350 can be seen. Else can continue to trade within the mentioned range for some time.

Silver (30.56) has bounced back from 29.53 yesterday. It has to rise past 31 to become bullish towards 32-33. Else a fall towards 29.00-28.50 cannot be ruled out.

Copper (4.5410) has bounced back above 4.60 after testing 4.52. If it sustains above 4.60, a rise towards 4.7-4.8 can be seen. The fall towards 4.50-4.45 or 4.30 that we had mentioned yesterday may not happen now.

Natural Gas (2.7660) has bounced back above 2.70. Near term outlook is mixed. A sideways trade between 2.5-3.0 can be seen for a while.

f1:30 07:00 Australia Trade Balance
Expn – … Expected 5.5 … Previous 5.0

9:00 14:30 EU Retail Sales
Expn 0.0% … Expected 0.2% … Previous 0.8%

12:15 17:45 ECB Mtg
Expn 4.50% … Expected 4.25% … Previous 4.50%

12:30 18:00 US Trade Balance
Expn – … Expected -69.8 … Previous -69.4

Data Yesterday
…………..
22:30 04:00 AU PMI
Expn – … Expected – … Previous -13.9 …Actual -31.1

1:30 07:00 AU GDP
Expn – … Expected 0.2% … Previous 0.3% …Actual 0.1%

5:00 10:30 IN Services PMI
Expn 61.6 … Expected 61.4 … Previous 60.8 …Actual 60.2

12:15 17:45 US ADP Emp
Expn – … Expected 175K … Previous 188K …Actual 152K

14:00 19:30 BOC Meeting
Expn – … Expected 4.75% … Previous 5.00% … Actual 4.75%