The Dollar Index sustains above 105 while Euro faces downside pressure due to political uncertainty in the Eurozone and could fall to 1.0675-1.0650 on a confirmed break below 1.0720. Aussie and Pound are headed up towards the upper end of the 0.6580-0.6720 and 1.28-1.26 ranges respectively. EURJPY is holding the range of 168-170 while USDJPY is headed towards 158. USDCNY is bullish above 7.25 to rise to 7.26/28 in the medium term. 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 upside capped at 83.60 for the near term.

Dollar Index (105.26) tested 105.45 before declining a bit. The US CPI and FOMC policy meeting are due today. We may expect a range of 105.50-104 to hold for the near term. However, a break above 105.50 will open the door for 106-106.50.

EURUSD (1.0741) has been coming down since the last few sessions as expected. The French governing party lost the EU vote to the far right, prompting French President Emanuel Macron to dissolve the local parliament and call for early elections. The Euro is facing increasing downside pressures amid political uncertainty in the eurozone, with analysts expecting more losses to come. A test to 1.0720 was seen yesterday before it recovered from there. But the outlook continues to remain bearish to 1.0700-1.065 while below 1.08.

Dollar-Yen (157.18) is gradually rising towards 158 as expected. Thereafter, whether the rise gets halted or extends further up will have to be seen.

EURJPY (168.85) is currently trading lower within its range of 170-168. The pair needs to necessarily give a break on either side to give further directional clarity. Until then, the mentioned range of 170-168 can persist for a while.

USDCNY (7.2530) has a potential to target 7.26-7.28 in the medium term while above 7.25.

Aussie (0.6615) and Pound (1.2742) are moving towards the upper end of their range of 0.6580-0.6720 and 1.26-1.28 respectively. A strong break past current levels will be needed to continue the uptrend.

USDINR (83.5310) rose to the level of 83.5750 in line with our expectations. We expect the upside to be capped up at 83.60 for the near term. A narrow range of 83.60-83.30 and a broad range of 83.60-83.00 can hold for a while.

EURINR (89.7553) is nearing the lower end of its near-term range of 89.50-91.25. Watch price action closely around 89.50 as failure to bounce back can drag it further to test 89 before bottoming out.

The US Treasury yields have come down again. A further fall from here will negate the chances of a rise and will drag them lower in the coming days. The US Fed meeting outcome and the US CPI data release today are important to watch. The German yields have dipped. But supports are there to limit the downside and keep the broader uptrend intact. The 10Yr and 5Yr GoI are coming down within their broad sideways range. We expect the range to remain intact.

The US 10Yr (4.40%) and the 30Yr (4.54%) yields have come down again. A further from here can drag them down to 4.3%-4.2% (10Yr) and 4.4%-4.35% (30Yr) straight away. It will negate the chances of the rise to 4.5%-4.6% (10Yr) and 4.7% (30Yr) mentioned yesterday.

The German 10Yr (2.62%) and the 30Yr (2.77%) yields have dipped slightly. Support is at 2.55%-2.5% (10Yr) and 2.7%-2.65% (30Yr). While above these supports the outlook will remain bullish to see 2.8%-2.9% (10Yr) and 3% (30Yr) on the upside over the medium-term.

The 10Yr GoI (7.0632%) is holding above 7.06% within its 7%-7.12% range while the 5Yr GOI (7.0156%) has come down to the lower end of the range. We expect this broad 7%-7.1%/7.12% range to remain intact.

Dow Jones, DAX and Nikkei have dipped whereas Nifty struggles to get a strong follow-through rise. Dow Jones and DAX might fall towards their immediate support. Nifty has to rise past 23400-23500 for increased bullishness. Else can fall back. Shanghai remains weak but could soon bounce back from the support at 3000.

Dow (38747.42, -0.31%) is struggling to rise. It looks vulnerable for a fall to 38000 in the coming days.

DAX (18369.94, -0.68%) is coming down. It can test the 18200-18100 support zone and then resume the uptrend targeting 19000 and higher levels.

Nifty (23264.85, +0.02%) seems to be struggling to get a strong follow-through rise above 23400. A fall below 23200-23150 can take it down to 22750-22500. Need a decisive rise past 23500 to move up to 23800-24000.

Nikkei (39336.66, -0.71%) couldn’t sustain the break above 39000 and has dipped after testing 39337. Key support is at 38000. While that holds, chances of rise towards 40000 in the near term will remain intact.

Shanghai (3026.52, -0.05%) remains subdued but we expect the support at 3000 to hold and produce a bounce towards 3050-3100. In case a break below 3000, if seen, can extend the fall to 2950.

Commodities have resistance overhead. While the resistances hold, there could be chances of some profit taking in the market. All focus is on the US CPI data and FOMC meeting today as these could bring volatility in the market.

Brent ($ 82.21) and WTI ($ 78.30) are hovering below their resistance at $ 82.50 and $ 79 respectively. While those holds, a fall back towards $ 80-79 (Brent) and $ 76-75 (WTI) can be seen. Else they would be further bullish towards $ 85 and $ 80-81.

Gold (2328.20) remains stable above 2300. Resistance is seen at 2350 and then at 2400. While these holds, Gold is likely to break below the lower end of the 2400-2300 range and fall towards 2250-2200 in the coming days.

Silver (29.45) can test 28.70-28.00 on the downside while below 30. Thereafter we need to see if it bounces back towards 30 or falls further to 27.

Copper (4.5260) appears ranged between 4.40-4.60. Resistance is now seen at 4.60-4.70, while below which, a dip towards 4.3-4.24/4.20 cannot be ruled out.

As expected, Natural Gas (3.1150) has moved up towards 3.20, a key immediate resistance. A break above it, if seen, can trigger a rise towards 3.4-3.5. Else it can fall back towards 3.0-2.9.

1:30 07:00 CN CPI (YoY)
Expn – … Expected 0.4 … Previous 0.3

1:30 07:00 CN PPI
Expn – … Expected -1.5 … Previous -2.5

6:00 11:30 UK Trade Bal
Expn -13.1 … Expected -14.2 … Previous -14.0

12:00 17:30 IN IIP
Expn 5.7% … Expected 4.6% … Previous 4.9%

12:00 17:30 IN CPI
Expn 4.93 … Expected 4.90 … Previous 4.83

12:30 18:00 US CPI (MoM)
Expn 0.3 … Expected 0.1 … Previous 0.3

12:30 18:00 US Core CPI (MoM)
Expn 0.3% … Expected 0.3% … Previous 0.3%

18:00 23:30 US FOMC Meeting
Expn 5.50% … Expected 5.50% … Previous 5.50%

Data Yesterday
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6:00 11:30 UK Unemp
Expn 4.4% … Expected 4.3% … Previous 4.3% …Actual 4.4%