The Dollar Index has surged past 105 despite the softer PPI data released yesterday. Dollar Index could trade within 104-105.50 and Euro if sustained above 1.07, then it can trade within 1.07-1.09; else it can get further dragged towards 1.065 before bottoming out. Aussie and Pound can remain ranged within 0.6580-0.6720 and 1.28-1.26 respectively. EURJPY and USDJPY can trade within 168-170 and 156-158 region respectively. Watch out for the BOJ meeting scheduled today to get further directional clarity for the near term. USDCNY looks bullish to 7.26/28 in the medium term while above 7.25. EURINR can trade within 89.50-91.25 region for some time. USDINR is likely to sustain trade within 83.60-83.30 region with upside capped at 83.60 for the near term.

Despite the softer PPI data release yesterday, Dollar Index (105.21) has risen significantly and is headed towards the upper end of its range of 104-105.50. However, a break above 105.50 will be needed to open the door for 106-106.50 in the medium term. Watch price action around 105.50.

EURUSD (1.0742) has slipped below 1.08 as the Dollar strengthened. An immediate support can be seen around 1.0720 – 1.07 which if held, can continue to move within 1.07-1.09 region. Only a decisive break below 1.07 if seen, can drag it further to deeper support at 1.065 before bottoming out.

Dollar-Yen (157.27) is holding well within the mentioned narrow range of 156-158 and can continue to do so in the near term. Thereafter, whether the rise gets halted or extends further up will have to be seen. Some directional clarity could be expected after the BOJ meeting scheduled today.

EURJPY (168.95) tested 170.13 on the upside before falling back within its range of 168-170. The pair needs to necessarily break on the upside for a rise towards 170-171. Else, the immediate range of 170-168 can persist for a while.

USDCNY (7.2542) has sustained well above 7.25 and as mentioned previously, can target 7.26-7.28 in the medium term. View is bullish above 7.25.

Aussie (0.6636) and Pound (1.2761) continue to trade within 0.6580-0.6720 and 1.26-1.28 region respectively. Unless a strong break past 0.6720 and 1.28 is seen, the stated range may persist for a while.

USDINR (83.55) is likely to continue trading within its range of 83.60-83.30 for the next few sessions with a possible test of 83.60 on a weaker Euro today.

Euro weakening against the Dollar let EURINR (89.7647) to fall sharply towards the lower end of its range of 89.50-91.25 contrary to our expectation of seeing trade above 90. Unless a decisive break on either side of the range is seen, we expect the mentioned range to hold.

The US Treasury yields continue to fall in line with our expectation. The yields can fall further to test their supports and then rise back eventually in the coming days. The German yields have dipped below their support. Failure to rise back from here can drag them further lower. The 10Yr GoI is coming down within its range. It can now dip further to test the lower end of its range. The 5Yr GoI is at a key support. It has to bounce back from here immediately to avoid more fall.

The US 10Yr (4.26%) and the 30Yr (4.41%) yields continue to fall as expected. The yields can test 4.2%-4.1% (10Yr) and 4.35%-4.3% (30Yr) and then possibly rise back again.

The German 10Yr (2.47%) and the 30Yr (2.64%) yields have dipped below their supports at 2.5% (10Yr) and 2.65% (30Yr) support zone. Failure to rise back from here can take the yields further down to 2.4% (10Yr) and 2.55% (30Yr). That will reduce the chances of the rise to 2.8%-2.9% (10Yr) and 3% (30Yr) that we were expecting. Wait and watch.

The 10Yr GoI (7.0385%) is coming down within its 7%-7.12% range and can test the lower end of the range now. We expect the range to remain intact and the yields to rise back from around 7%.

The 5Yr GOI (6.9890%) has support near current levels. A bounce from here can take it back up to 7.1%. Else the fall can extend up to 6.95%-6.9%.

Dow Jones trade lower and could fall towards 38000 while Dax has decline sharply but could hold above the support region of 18200/18100 and bounce back soon towards 18800/19000. Nifty needs to break above 23500 to turn further bullish else can fall back towards 23200/23000. Nikkei and Shanghai trade lower but could hold above supports of 38000 and 3000 respectively from where a bounce is expected.

Dow (38647.10, -0.17%) remains lower and is more likely to see a fall to 38000 first. The chances of a rise above 39000 looks bleak in the absence of any strong positive trigger.

DAX (18265.68, -1.96%) has declined sharply giving back all the gains made on Wednesday. The 18200-18100 support zone is likely to hold and produce a bounce back to 18800-19000. A break below 18100 can take it down to 17900-17700.

Nifty (23398.90 +0.33%) sustains higher but still seems to lack strong buying. While above 23200, a rise to 23800-24000 is possible. A break above 23500 can trigger that rise. Alternatively, a fall below 23200 if seen can take it down to 23000-22800.

Nikkei (38711.17, -0.024%) fell to 38554.75 but has managed to bounce back from there now. Support at 38000 may hold well in the near term. We may expect a slow rise towards 39000 and then towards 40000 in the medium term while above 38000.

Shanghai (3021.60,-0.24%) opened slightly lower today at 3020 compared to closing of 3028 yesterday. The index has been falling slowly but the trade range looks narrow. Support at 3000 can hold for the near term and produce a bounce to 3050-3100 in the medium term. Failure to hold above 3000 could make it vulnerable to break lower and head towards 2950-2900 in the medium term.

Crude prices are sustaining well below their resistances and could be stable to bearish for the near term unless a sharp rise from the current level is seen. Metals and Natural gas remain bearish for the near term. Copper could rise on a decisive break above 4.60 else can also fall along with the precious metals.

Brent ($ 82.43) and WTI ($ 78.23) seem to be rising back towards resistances at $ 82.50 and $ 79 respectively. A break on the upside could extend its rising trajectory for the near term towards $ 84/85 and $ 80/81 respectively. However, on the downside we do not negate a fall to $ 78/77 and $ 74/72 respectively.

Gold (2320.90) looks bearish for a fall towards 2300 or slightly lower to 2280/2260 in the near term before halting its current dip.

Silver (29.08) fell to a low of 28.73 yesterday before rising slightly to current levels. It could take support near 28.50 and rise back to 30/31 else could be bearish for the medium term if a fall below 28.50 is seen.

Copper (4.4910) has risen back to 4.50 and if it manages to rise further from here, it could head towards 4.6/4.8. Note that while below 4.60, bearish view for a fall towards 4.40/4.20 remains intact. Only a rise above 4.60 if seen and sustained can negate the stated bearishness.

Natural Gas (2.9240) fell to a low of 2.8980 so far as expected and might dip further to 2.8 while resistance at 3.2 holds well.

3:00 08:30 BOJ Meeting
Expn – … Expected 0.10% … Previous 0.10%

6:30 12:00 IN WPI
Expn 1.74% … Expected 2.50% … Previous 1.26%

9:00 14:30 EU Trade Bal
Expn – … Expected 15.7 … Previous 17.3

Data Yesterday
…………..
1:30 07:00 Australia Labour Force
Expn – … Expected 30.0K … Previous 37.4K …Actual 39.6K

9:00 14:30 EU Ind Prodn (MoM)
Expn 0.0% … Expected 0.1% … Previous 0.5% …Actual – 0.1%

12:30 18:00 US PPI
Expn 0.1% … Expected 0.1% … Previous 0.5% …Actual -.0.2%

12:30 18:00 US PPI ex Food & Energy (MoM)
Expn 0.2 … Expected 0.3 … Previous 0.5 …Actual 0.0

13:00 18:30 IN Trade bal
Expn -20.42 … Expected – … Previous -19.10