After the higher-than-expected US Existing Home Sales data release, Dollar Index rose sharply to test 105.915 on the upside. EURUSD on the other hand is declining as expected and can test 1.0650 on the downside. Dollar-Yen and EURJPY are nearing our expected targets of 160 and 171 respectively. Watch price action closely around current levels. Aussie & Pound continue to trade within 0.6580-0.6720 and 1.26-1.28 region respectively. USDCNY has risen past 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 falls back below 83.60 last Friday and if the fall sustains, a dip towards 83.45/40 could be seen.

Higher than the market expectation release on US Existing Home Sales on Friday led Dollar Index (105.843) to test 105.915 on the upside. While above 105.50, our view is to see a rise towards 106-106.30-106.50 in the coming sessions before possibly topping out.

EURUSD (1.0689) is declining in line with our expectations and can even test our mentioned target of 1.0650 soon. Overall, a broad range of 1.0650-1.0800 is likely to persist for a while.

Dollar-Yen (159.70) and EURJPY (170.71) are nearing our mentioned targets of 160 and 171. Now watch price action closely around the current levels as to whether the rise gets further extended to 161 and 172 or falls back from here itself.

USDCNY (7.2609) has exceeded our initial target of 7.26 and while the rise sustains, it has scope to rise further towards 7.28 in the medium term.

Aussie (0.6634) and Pound (1.2639) can continue to trade within their respective ranges of 0.6580-0.6720 and 1.26-1.28 respectively, unless a decisive break is seen on either side of the range.

USDINR (83.5375) fell to 83.4825 after testing a high of 83.6275 and closed slightly higher at 83.5375. While it sustains below 83.60, it can fall further towards 83.45-83.40. A break below 83.45/40 is needed to come down towards 83.30. In the medium term, a rise towards 83.70/80 cannot be ruled out. We can expect a broad range of 83.67-83.35/30 to hold for this week.

EURINR (89.2810) is headed towards 89 which if holds can keep the range of 89-90 intact else, it could open doors for a fall to 88.50-88 in the medium term. Watch price action near 89.

The US Treasury yields are struggling to get a strong rise. That keeps them vulnerable to fall more to test their key supports. The German yields continue to hover around their crucial support. A strong follow-through rise is needed from here to avoid a deeper fall. The 10Yr and 5Yr GoI are holding above their support. A rise from here can take them higher in the coming days.

The US 10Yr (4.25%) and the 30Yr (4.39%) yields have dipped slightly. While below 4.3%-4.35% (10Yr) and 4.5% (30Yr) the view is bearish to see a fall to 4.2%-4.1% (10Yr) and 4.35%-4.25% (30Yr). Thereafter the yields can rise back again.

The German 10Yr (2.40%) and the 30Yr (2.59%) yields continue to stay at their crucial 2.4% and 2.55% support respectively. We reiterate that a strong follow-through rise is needed from here to negate a deeper fall to 2.2% (10Yr) and 2.35% (30Yr). Wait and watch.

The 10Yr GoI (6.9723%) sustains above the support at 6.95%. While above 6.95% the yield can break 7% and rise to 7.05%. A break below 6.95% if seen can take it down to 6.9%.

The 5Yr GoI (6.9886) can also break 7% and rise to 7.1% while it sustains above 6.97%.

Dow Jones can rise to 40000 on a strong break above 39200. DAX struggles to rise which makes it vulnerable to break it support of 18000 and fall further to 17700. Nifty has dipped again after testing an all time high but has support below current level, which if hold, can lead to a bounce back. Nikkei lacks a strong follow through rise but bias will remain bullish as long as it holds above the support at 38000. Shanghai has broken below its support and can fall further in the near term.

Dow (39150.33, +0.04%) can rise to 40000 on a strong break above 39200. Immediate support is now around 38800 which has to be broken for it to come down to 38000 again.

DAX (18163.52, -0.50%) seems to be struggling to rise. It looks vulnerable to break 18000 and fall to 17700. A decisive rise above 18400 is needed to negate this fall.

Nifty (23501.10, -0.28%) has come off from the high of 23667. While above 23350 the upside is still open to test 23800-24000. If it declines below 23350, a fall to 23000-22800 is possible. Wait and watch.

Nikkei (38,709.50, +0.23%) lacks a strong follow through rise. A rise towards 39000-39300 is still possible while above 38000.

Shanghai (2966.79, -1.02%) has broken below 3000 contrary to our view that 3000 will hold. While below 3000, a dip towards 2950-2930-2900 is possible.

Crude prices have dipped slightly but our view will remain bullish as long as the crude prices sustains above their near term support. Gold and Silver have fallen back sharply as the resistance held well and might dip further towards their immediate support from here. Copper has fallen sharply towards the lower end of the range and looks vulnerable to break on the downside and fall deeper in the near term. Natural gas has recovered a bit but could face resistance at 2.90/2.95.

Brent ($ 84.99) and WTI ($ 80.48) have dipped slightly after testing a high of $ 86.24 and $ 81.78 on last Friday. But if they sustains above $ 85 (Brent) and $ 80 (WTI), a rise towards $ 87.50-90 (Brent) and $ 82.50-85 (WTI) cannot be ruled out in the coming days. Only a decisive break below $ 85 and $ 80, if seen, can drag the crude prices down to $ 84-83 (Brent) and $ 78 (WTI) respectively.

Gold (2337.10) has fallen back below 2340 as the mentioned resistance at 2380/2400 has held well. We might see a dip towards 2300. The range of 2400-2300 will persist for a few more sessions.

Silver (29.61) has fallen sharply below 29.70 as the resistance near 31 held well. A further dip towards 29.00-28.80/70 could be seen. Thereafter if it breaks below 28.80/70, then it would be vulnerable to a fall towards 27.

Copper (4.4265) has come down sharply towards the lower end of the 4.6-4.4 range after failing to rise past 4.60. This makes it vulnerable to a break below 4.4 and fall deeper towards 4.24/4.20.

Natural Gas (2.8120) has bounced back above 2.80 after testing a low of 2.67. However, resistance is seen at 2.90-2.95. While that holds, chances of fall towards 2.6-2.5 cannot be ruled out.

8:00 13:30 GER IFO Business Climate
Expn 88.9 … Expected 89.7 … Previous 89.3

8:00 13:30 GER IFO Business Situations
Expn 87.0 … Expected 88..4 … Previous 88.3

8:00 13:30 GER IFO Business Expectations
Expn 88.9 … Expected 91.0 … Previous 90.4

Data Friday
…………..
23:05 04:35 UK Cons Conf
Expn -15 … Expected -16 … Previous -17 …Actual -14

23:30 05:00 JP CPI
Expn 3.2 … Expected 2.6 … Previous 2.5 …Actual 2.9

14:00 19:30 US Existing Home Sales
Expn 4191K … Expected 4080K … Previous 4140K …Actual 4110K