Despite some negative US data releases Dollar Index continues to remain strong and surged past 105.50 as the SNB went ahead with the rate cut of 25bps and BOE kept the rates unchanged at 5.25%. EURUSD on the other hand is trading lower within its range of 1.0650-1.0750. Dollar-Yen and EURJPY have risen above their resistances and could be further bullish in the near term. Aussie & Pound have declined a bit but overall continues to trade within 0.6580-0.6720 and 1.26-1.28 region respectively. Only a decisive break on either side can give further directional clarity in the near term. USDCNY has risen to 7.26 and might rise further towards 7.28 in the coming weeks while above 7.25/7.24. EURINR can trade within 89.00-89.80 region for some time. USDINR has surged, breaking above the resistance at 83.60 but in the offshore market it has fallen back below 83.60. Watch price action closely around current levels as to whether the rise gets further extended towards 83.70/80 or falls back within its previous range of 83.60-83.30.

Despite the weaker-than-expected economic data releases of US Philifed Index, Housing starts and Current account balance to 1.3% (4.8%), 1277K (1370K) and -238B (-207B) respectively, Dollar Index (105.59) surged as the SNB made a 25-bps rate cut to 1.25% and BOE kept it stable to 5.25%. Now, if the break sustained above 105.50, a rise towards 106-106.30-106.50 could be seen in the medium term.

EURUSD (1.0717) tested 1.0748 before it started to decline. While the resistance around 1.0750-1.0800 holds, it can fall towards 1.0650 on the downside and overall, a broad range of 1.0650-1.0800 is likely to persist for a while.

Dollar-Yen (158.90) and EURJPY (170.28) has finally risen past our expected reversal levels of 158.00-158.50 and 170.00 respectively and now if sustained, can rise towards 159.50-160 and 171-172. A better clarity in the view can be expected after the JP CPI release today.

USDCNY (7.2602) is trading near 7.26 and has scope to rise further towards 7.28 in the medium term while above 7.25-7.24.

Dollar strengthened post the SNB rate cut and BOE keeping interest rate unchanged. This led to Aussie (0.6660) and Pound (1.2662) to trade lower within their respective range of 0.6580-0.6720 and 1.26-1.28. A decisive break is still needed either side of the range further directional clarity in the medium term.

USDINR (83.6575) surpassed the resistance of 83.60 to test an all time high of 83.6675 due to foreign fund outflows, strong demand for dollars from importers and Euro and Chinese Yuan weakness. We may see RBI active in the market to protect Rupee from depreciating further. In the NDF, USDINR is currently trading below 83.60. If it opens below 83.60, then we can expect a range of 83.60-83.30 to hold for some more time. But in case if it happens to open and sustain above 83.60; then it can rise further towards 83.70-83.80. Watch price action near 83.60.

EURINR (89.5827) continues to trade within 89.00-89.80 region and can see a possible extension to 90 on the upside. A broad range of 89-90 can persist for a while.

The US Treasury yields have moved up further. But this is likely to be short-lived and the yields can fall back to test their key supports going forward. The German yields have bounced from their crucial supports. Need to see if they are getting a strong follow-through rise from here or not. The 10Yr and 5Yr GoI are holding well above their supports. Good chances for them to get a rise from here.

The US 10Yr (4.27%) and the 30Yr (4.41%) yields have moved up further but are unlikely to sustain. We retain our bearish view of seeing a fall to 4.2%-4.1% (10Yr) and 4.35%-4.25% (30Yr) and then a reversal is possible.

The German 10Yr (2.43%) and the 30Yr (2.59%) yields have bounced back from their support at 2.4% and 2.55% respectively. A strong follow-through rise from here will negate the danger of seeing a deeper fall to 2.2% (10Yr) and 2.35% (30Yr). We will have to wait and see.

The 10Yr GoI (6.9781%) is holding well above the support at 6.95%. A rise to 7.05% is possible on a break above 7% from here. If a fall below 6.95% happens, then a test of 6.9% is possible.

The 5Yr GoI (6.9880) on the other hand can rise to 7.1% while it sustains above 6.97% and breaks above 7% decisively.

Dow Jones and DAX saw a solid rise whereas decent bounce is seen in Nifty and Nikkei. Dow Jones has to rise past its resistance for increased bullishness. DAX can rise further to 18400-18500 from here but the danger of breaking below 18000 cannot be ruled out. Nifty and Nikkei has scope to rise towards their resistance while above 23350 and 38000 respectively. Shanghai is attempting to break below the lower end of the range but only a decisive break, if seen, can drag it further down. Else it may continue to be ranged for some more time.

Dow (39134.76, +0.77%) has risen into the 39000-39200 resistance zone. A decisive break above 39200 will be bullish to revisit 40000 levels. The price action today will be important to watch.

DAX (18254.18, +1.03%) has risen well. A further rise to 18400-18500 looks possible. However, the danger of breaking 18000 and the fall to 17700 is still there.

Nifty (23567, +0.22%) is hovering around 23500 over the last few days. There seems to be a lack of strong buying. But, while above 23350, the chances of the rise to 23800-24000 is still alive. Wait and watch.

Nikkei (38689.00, +0.11%) has bounced back as the support at 38000 held well. A rise towards 39300 is possible while above 38000.

Shanghai (3006.20, +0.03%) fell to a low of 2991.35 today before bouncing back from there. For now the 3000-3050 range remains intact. Only a decisive break below 3000, if seen, can lead to a fall towards 2950-2900.

Crude prices are holding well above their support levels and have bounced back a bit. View is bullish as long as the crude prices sustains above their near term support. Gold and Silver have risen towards their key resistance as expected, which if holds, can lead to a fall back. Copper has risen towards its upper end of the range. Need to see if it breaks on the upside or not. Natural gas has fallen sharply below 2.8 contrary to our bullish view and might fall further if it sustains below 2.8.

Brent ($ 85.64) and WTI ($ 81.23) sustains well above the support at $ 85-84 (Brent) and $ 80-79 (WTI). This keep the chances alive for a rise towards $ 87.50-90 (Brent) and $ 82.50-85 (WTI) in the coming days.

Gold (2373.40) has moved up towards 2380 as expected. If 2380/2400 holds, a fall back towards 2350-2300 can be seen. Overall the 2400-2300 can persist for some time. Only a decisive break above 2400, if seen, can take it higher to 2450 before turning lower from there.

Silver (30.57) rose to 30.91 in line with expectations for a rise towards 30.80-31.00. Above 31, next immediate resistance is seen at 31.50. It can fall back towards 30.00-29.20, if the resistance near 31-31.50 holds. Only a strong break above 31.00-31.50, if seen, can open doors towards 32-33.

Copper (4.5455) has moved up towards the upper end of the 4.4-4.6 range. A rise past 4.6 is needed to become bullish towards 4.7-4.8. Else can continue to trade sideways between 4.6-4.4 for a while.

Natural Gas (2.7190) has fallen sharply towards 2.7 from a high of 2.95. This is contrary to our view of seeing a rise towards 3.0-3.1. If the fall sustains below 2.8, a further dip towards 2.6-2.5 can be seen.

23:05 04:35 UK Cons Conf
Expn -15 … Expected -16 … Previous -17

23:30 05:00 JP CPI
Expn 3.2 … Expected – … Previous 2.5

14:00 19:30 US Existing Home Sales
Expn 4191K … Expected 4080K … Previous 4140K

Data Yesterday
…………..
8:30 14:00 SNB Mtg
Expn – … Expected 1.50% … Previous 1.50% …Actual 1.25%

11:00 16:30 BOE Mtg
Expn – … Expected 5.25% … Previous 5.25% …Actual 5.25%

11:00 16:30 UK BOE Minutes
Expn – … Expected 0-2-7 … Previous 0-2-7 …Actual 0-2-7

12:30 18:00 US Philifed Index
Expn 5.5 … Expected 4.8 … Previous 4.5 …Actual 1.3

12:30 18:00 US Housing Starts
Expn 1397K … Expected 1370K … Previous 1352K …Actual 1277

12:30 18:00 US Current Account Balance
Expn – … Expected -207.0 … Previous -221.8 …Actual -237.6