The Dollar Index continues to trade above 105 and looks bullish towards 106+ while EURUSD can trade within 1.0750-1.0650 for now. Dollar-Yen and EURJPY continue to trade below crucial resistances near 158 and 170 which needs to necessarily break to turn further bullish for the medium term; else a sharp decline from current levels could be seen. Aussie & Pound are ranged within 0.6580-0.6720 and 1.26-1.28 respectively. Only a decisive break on either side can give further directional clarity in the near term. USDCNY continues to trade flat above 7.25. EURINR can trade within 89.80-89.00 region for some time. USDINR on the offshore tested 83.31 and need to see if the dip is seen today on the onshore market followed by a possible rise towards 83.50/60.

Dollar Index (105.26) continues to remain volatile within its range of 104-105.50. As mentioned earlier, a decisive break past 105.50 can take it towards 106-106.50 in the medium term.

EURUSD (1.0738) had risen slightly past our mentioned range of 1.0750-1.0650 to test 1.0761 before coming down. Currently it is trading near the upper end of its range, only a strong break past 1.08 will be needed to make the outlook bullish, else the mentioned range is likely to persist for a while.

Dollar-Yen (157.80) and EURJPY (169.45) attempted to rise past our expected narrow range of 156-158 and 168-170 respectively but has not been able to do so. Only a strong break past 158 and 170 respectively can take them higher in the medium term. Until then, the range is likely to hold.

USDCNY (7.2553) has been trading flat since the last 2-3 sessions but while above 7.25, the pair can target 7.26-7.28 in the medium term. The view is bullish above 7.25.

The RBA kept the interest rates unchanged at 4.35%. Aussie (0.6665) and Pound (1.2712) continue to trade within 0.6580-0.6720 and 1.26-1.28 region respectively. A break on either side of the range would be needed for further directional clarity in the medium term.

USDINR (83.4150) closed yesterday’s session at 83.4150 but later fell to test 83.3130 on the NDF-offshore markets. It would be important to see if the pair falls to 83.30 on the onshore markets as well before rising higher towards 83.50/60 again. The immediate downside could be limited to 83.30/25 for now.

EURINR (89.5615) is likely to trade within 89.80-89.00 for the next few sessions with a possible extension to 90 on the upside.

The US Treasury yields continue to fall as expected. The yields can fall further to test their supports and then can rise back again. The German yields have dipped just below their key supports. Failure to bounce back from here can trigger a deeper fall. The 10Yr GoI looks mixed within its broad range. The 5Yr GoI is poised near a crucial support. It has to get a strong bounce from here to avoid the danger of falling more.

The US 10Yr (4.22%) and the 30Yr (4.36%) yields are coming down towards 4.2%-4.1% (10Yr) and 4.35%-4.25% (30Yr) as expected. We can expect the yields to reverse higher after this fall.

The German 10Yr (2.39%) and the 30Yr (2.54%) yields have dipped just below their 2.4% and 2.55% support respectively as expected. Failure to bounce back from here can drag them down to 2.2% (10Yr) and 2.35% (30Yr).

The 10Yr GoI (7.0370%) is oscillating around 7.04% over the last few days. The broader 7%-7.12% range is intact, and the outlook remains within this range.

The 5Yr GOI (6.9981%) hovers above the crucial support level of 6.95%. A strong bounce from here and a subsequent rise past 7% is needed to become bullish for a rise to 7.1% and higher. A break below 6.95% can take it down to 6.9% and lower.

Dow Jones and DAX have risen further but needs to rise past 39000-39200 and 18200 to target further upside and to reduce the danger of falling. Nifty has broken above 23500 and looks bullish towards 23800-24000 in the near term. Nikkei can rise towards 39000-39300 while above 38000. Shanghai looks ranged above 3000.

Dow (38834.86, +0.15%) is moving up. But a strong break above the 39000-39200 resistance zone is needed to see 40000 on the upside and avoid falling back to 38000. The US markets are closed today.

DAX (18131.97, +0.35%) has risen further. As mentioned yesterday, a rise past 18200 is needed to see 18500 and higher levels. That will negate the danger of breaking 18000 and the fall to 17700.

Nifty (23557.90 +0.39%) has risen above 23500 and can now target 23800-24000. Immediate support will be at 23500-23480. Below that 23300-23200 the next strong support.

Nikkei (38,673.50, +0.64%) has bounced back as the support at 38000 held well. A rise towards 39000-39300 can be seen while above 38000.

Shanghai (3018.45, -0.39%) is likely to trade sideways between 3000-3050 for a while. Only a decisive break below 3000, if seen, can lead to a fall towards 2950-2900.

Brent and WTI have risen above $ 85 and $ 80 respectively an looks bullish to target further upside. Gold and Silver can rise towards their key resistance in the near term. Copper has risen to 4.50 but needs to rise past 4.55-4.60 to ease the downside pressure. Natural gas bounced back above 2.90 contrary to our bearish view and has now scope to rise towards 3.0-3.1.

Brent ($ 85.29) and WTI ($ 80.69) have broken above $ 85 and $ 80 respectively. While this break sustains, a further rise towards $ 87.50-90 (Brent) and $ 82.50-85 (WTI) could be seen.

Gold (2344.80) has risen towards the upper end of the 2300-2360 range. It can rise towards the resistance at 2380/2400. A break above 2350/2360 can trigger this rise. We can expect a broad range of 2300-2400 to hold for a while.

Silver (29.57) is holding well above the support at 29. It may break above 30 and rise towards 30.80-31.00 in the near term while it stays above 29.00-28.50.

Copper (4.5120) fell to a low of 4.3750 yesterday before bouncing back to 4.50. Resistance is now at 4.55-4.60. It has to rise past 4.55/4.60 to reduce the danger of falling towards 4.24/4.20 and to move up towards 4.7-4.8.

Natural Gas (2.9260) has bounced back above 2.90 contrary to our view of seeing a fall towards 2.65 or 2.50. It can rise towards 3.0-3.1 while above 2.80.

6:00 11:30 UK CPI Y/Y
Expn 1.9% … Expected 2.0% … Previous 2.4%

Data Yesterday
…………..
4:30 10:00 RBA Meeting
Expn – … Expected 4.35% … Previous 4.35% …Actual 4.35%

9:00 14:30 EU CPI (YoY)
Expn 2.568% … Expected 2.6% … Previous 2.372% …Actual 2.574%

12:30 18:00 US Retail Sales (MoM)
Expn 0.1% … Expected 0.3% … Previous -0.3% …Actual 0.2

13:15 18:45 US Industrial Production
Expn -0.1% … Expected 0.3% … Previous 0.0% …Actual

13:15 18:45 US Capacity Utilization
Expn 78.2% … Expected 78.6% … Previous 78.4% …Actual

20:00 01:30 US TICS (Net foreign purch of long-term Sec)
Expn – … Expected 69.3B … Previous 102.6B …. Actual 123.1B