Higher US NFP on Friday led the Dollar Index to rise sharply past 105 and if sustained, can test 106-106.50 on the upside. Euro, Aussie and Pound have slipped sharply falling below 1.08, 0.66 and 1.2750 respectively. EURJPY is moving higher within its range of 168-170 while USDJPY has risen past its range of 154-156.50 and is headed towards 158-159. USDCNY may remain stable below 7.25. EURINR can trade within 89.50-91.25 region for some time. USDINR is likely to sustain trade within 83.60-83.20/83.00 region with a possible rise today towards 83.50/60.

Higher than the previous US NFP release, i.e. 165K to 272K let the Dollar Index (105.15) to rise sharply past 105. Further if the rise continues, a test of 106-106.50 could be seen in the coming sessions before topping out. Only a decisive break below 105, if seen, would negate this rise and take it back to 104.50-104 instead.

EURUSD (1.0768) slipped sharply below 1.08 as the Dollar Index strengthened post higher US NFP. Immediate support can be seen around current levels, which needs to hold to bring the pair back towards 1.08-1.09. Else it would be vulnerable to test 1.07 on the downside.

Dollar-Yen (156.96) has moved up past its near-term range of 154-156.50 and can now head towards 158 in the coming sessions.

EURJPY (169.00) is nearing the upper end of its immediate range of 168-170. Thereafter, 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 (7.2470) continues to remain steady below 7.25 while downside is likely to be limited to 7.24-7.23. a decisive break above 7.25 is needed for bullishness to set in.

Aussie (0.6588) tested 0.6681 on Friday as expected before coming down sharply post US NFP data. Currently, it is nearing the lower end of its 0.6580-0.6720 range. 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. A bounce back from current levels could be possible.

Pound (1.2720) failed to sustain above 1.28 and reversed sharply upon testing 1.28177 on last Friday. Currently, it is testing its support near 1.27 but unless a confirmed break on either side of the range is seen, it is likely to trade within a broader range of 1.28-1.26.

On Friday, the RBI kept Repo Rate unchanged at 6.50%. We expect USDINR (83.3775) to open with a gap up today and rise towards the upper end of the 83.20-83.50/60 range on a weaker Euro. The downside could be limited to 83.30/20 for the near term.

EURINR (89.9375) is holding well below the resistance of 91 and can continue to trade within its earlier range of 89.50-91.25 for some time.

The US Treasury yields and German yields have risen sharply while the Indian yields have dipped. The ECB cut rates by 25bps last week while the RBI kept rates unchanged. With higher US NFP data now the FED is also likely to keep rates unchanged. The US 10yr and 30yr yields can rise some more in the near term towards 4.50%-4.65% while the German yields could show a slight rise with stability near current levels. The Indian yields look bearish for the near term and can fall towards 7% or slightly lower.

The US 10Yr (4.451%) and the 30Yr (4.57%) yields rose sharply contrary to expectations, after the higher-than-expected US NFP data release on Friday that has significantly reduced possibilities of a Fed Rate cut in its Sep-24 meeting. The yields can continue to rise in the near term towards 4.50% and 4.60/65% before pausing.

The German 10Yr (2.624%) and the 30Yr (2.73%) yields have also risen sharply contrary to our expectations. A more or less stable movement with small upticks looks likely for the near term with the 10yr rising towards 2.65/70% and the 30yr rising towards 2.80% soon.

The 10Yr GoI (7.0639%) has declined and can fall towards 7.02-7.00% before pausing while the 5Yr GOI (7.0201%) also has resistance near 7.06% and can fall towards 7-6.96% in the near term before pausing to reverse. The immediate view is bearish for the yields.

Dow Jones and DAX have retreated after the release of US strong NFP data as that have reduced the Fed rate cut expectations. Nifty surged sharply on last friday but a break above 23500 is needed to target 23800-24000. Else can fall back. Nikkei is stuck in a narrow range below 39000 but have scope to break above 39000 soon while it remain above 38000.

Dow (38799, -0.22%) has fallen back from a high of 39105. We reiterate that a strong break above 39000 is needed to strengthen the bullish case to revisit 40000 levels. A reversal from around 39000 can drag it down to 38000 again. Still, wait and watch.

DAX (18557.27, -0.51%) has fallen back below 18600 and looks ranged between 18400-18800. While it remains above 18400-18300, the chances of seeing 19000 and higher levels will remain intact. A break above 18850 can take it higher.

Nifty (23290.15, +2.05%) surged to a high of 23320 in line with our expectations for a rise towards 23250-23500. A break above 23500, if seen, can lead to an extended rise towards 23800-24000. Failure to rise above 23500 can keep it range between 23500-22500/22000.

Nikkei (38939.50, +0.73%) is stuck in a narrow range of 38500-39000. For now, the 38000-39000 range remains intact. But view remains the same to see a break above 39000 and rise towards 40000 in the coming days.

Shanghai (3051.27, +0.08%) is closed today. It might fall further towards 3000 in the near term.

Brent and WTI have to rise past $ 80 and $ 76 to target further upside. Else they would remain vulnerable to a fall towards $ 75-74 (Brent) and $ 70 (WTI) respectively. Strong US NFP data on last friday have caused metals to fall. Gold, Silver and Copper looks bearish for the near term. Natural Gas has scope to break above the upper end of the 2.5-3.0 range.

Brent ($ 79.92) and WTI ($ 75.62) lack strength to rise past $ 80 and $ 76. A sustained rise past $ 80 and $ 76 is needed to see a rise towards $ 82-82.50 and $ 78-79 respectively. Else a fall towards $ 75-$ 74(Brent) and $ 70 (WTI) cannot be ruled out.

Gold (2316.90) has fallen sharply towards 2300 after strong US NFP data. For now, the resistance at 2400 seems to be holding well. While below 2400, chances are high for it to break below 2300 and fall towards 2250-2200 in the coming days.

Silver (29.58) fell sharply from 31.67 contrary to our view for a rise towards 32-33. Might fall further towards 28.50-28.00.

Copper (4.4780) couldn’t rise towards 4.8-4.9 as expected. Instead fell sharply below 4.5 from 4.69. While the fall sustains below 4.5, a further dip towards 4.4-4.3 can be seen.

Natural Gas (2.9790) has moved up towards the upper end of the 3.0-2.5 range. It might break above 3.00 and rise towards 3.2-3.4. Immediate support is at 2.87-2.80.

23:50 05:20 JP GDP
Expn – … Expected – … Previous -0.5%

Data Friday
…………..
4:30 10:00 RBI Repo Rate
Expn 6.50% … Expected 6.50% … Previous 6.50% …Actual 6.50%

4:30 10:00 RBI Rev Repo Rate
Expn 3.35% … Expected – … Previous 3.35% …Actual 3.35%

4:30 10:00 RBI MSF
Expn 6.75% … Expected – … Previous 6.75% …Actual 6.75%

9:00 14:30 EU GDP
Expn – … Expected 0.3% … Previous 0.33% …Actual 0.31%

12:30 18:00 US NFP
Expn 241K … Expected 185K … Previous 165K …Actual 272K

12:30 18:00 US Unemployment Rate
Expn 3.9% … Expected 3.9% … Previous 3.9% …Actual 4.0%

12:30 18:00 US Avg Hrly Earnings
Expn 0.3 … Expected 0.3 … Previous 0.2 …Actual 0.4

12:30 18:00 US Average Hourly Earnings Production & Non Supervisory Employees
Expn 0.3 … Expected – … Previous 0.1 …Actual 0.1

12:30 18:00 CA Labour Force
Expn – … Expected 27.8K … Previous 90.4K …Actual 26.7K