The Dollar Index and Euro can remain ranged within 104.70/105-106.30/50 and 1.0750-1.0650 region for a while. The dollar-yen and EURJPY attempt to rise back towards 160 and 172 respectively. Watch price action closely around the current levels. Aussie & Pound continue to trade within 0.6580-0.6720 and 1.26-1.28 region. USDCNY is bullish towards 7.28 while above 7.26. EURINR can trade within 89.00-90/91 region for some time. USDINR needs to break below 83.40 to move towards 83.30 again while the upside could remain capped at 83.60 for the near term.

Slightly higher than expected US Consumer Confidence data release at 100.4 kept the Dollar Index (105.665) stable above 105. Currently, it has been rising. An immediate narrow range of 104.70/105-106.30/50 can persist in the medium term.

EURUSD (1.0710) observed a high of 1.0744, slightly below our mentioned target of 1.0750 before cooling down. While the resistance holds, a narrow range of 1.0750-1.0650 and a broad range of 1.08-1.0650 can hold for a while.

Dollar-Yen (159.76) and EURJPY (171.09) are attempting to rise back towards previous targets of 160 and 172. We need to be cautious around current levels to see of any intervention comes in from the BOJ to protect Yen against the fluctuations. Watch price action closely around current levels. A decisive fall below 158.50-158 on USDJPY and below 170 on EURJPY will be needed to negate any immediate bullishness.

USDCNY (7.2653) is rising above 7.26 and can see a slow rise towards 7.28 in the medium term. Overall, the view remains bullish above 7.25/26.

Aussie (0.6669) and Pound (1.2685) can continue to trade within their respective ranges of 0.6580-0.6720 and 1.26-1.28, unless a decisive break is seen on either side of the range.

USDINR (83.4375) had slipped towards the mentioned level of 83.40. A further break below 83.40 will be needed to come down towards 83.35/30. Failure to dip below 83.40 will again take the pair higher towards 83.55/60. An immediate range of 83.40-83.60 may hold with lesser chances of 83.35/30 to be seen on the downside.

EURINR (89.3681) continues to trade within its range of 89-90/91. Only a break below 89 if seen, could open doors for a fall to 88.50-88 in the medium term.

The US Treasury yields remain stable. The yields can fall from here to test their support and then rise back again. The German yields continue to hover above their crucial support. A strong follow-through rise from here is needed to negate a deeper fall. We will have to wait and watch. The 10Yr and 5Yr GoI are holding well above their support and are inching higher. Our view of seeing a rise in the GoI remains intact.

The US 10Yr (4.26%) and the 30Yr (4.39%) yields remain stable. While below 4.3%-4.35% (10Yr) and 4.5% (30Yr), a fall to 2%-4.1% (10Yr) and 4.35%-4.25% (30Yr) will remain intact. Thereafter the yields can rise back again.

The German 10Yr (2.41%) and the 30Yr (2.59%) yields are holding above their support at 2.4% (10Yr) and 2.55% (30Yr). We have to wait and see if they can get a strong follow-through rise from here to avoid the danger of seeing a deeper fall to 2.2% (10Yr) and 2.35% (30Yr).

The 10Yr GoI (6.9858%) has risen well. This keeps intact our view of seeing a break above 7% and a rise to 7.05%. Support is at 6.95%.

The 5Yr GoI (6.9888) has also inched up slightly. We retain the view of the yield breaking above 7% and rise to 7.1%. Support is at 6.97%.

Dow Jones and DAX have fallen back after the hawkish comments of FED Governor Bowman where she said that they are still not at a place where it is appropriate to cut the interest rate. Although Dow Jones has fallen but it has some near term support which could pull it back. DAX seems to be ranged between 18000-18400. Nifty has risen sharply yesterday and has scope to test its key resistance ahead before a corrective fall can be seen. Nikkei has surged breaking above its resistance and looks further bullish in the near term. Shanghai to test its key support before a bounce back can happen from there.

Dow (39112.16, -0.76%) has come down sharply. Supports are at 39000 and 38800 which have to hold to keep alive the chances of the rise to 40000-40100 mentioned yesterday. A break below 38880 can drag it down to 38000 again.

DAX (18177.62, -0.81%) has come down again, failing to rise above 18400. For now, 18000-18400 seems to be the range. A break below 18000 can take it down to 17700-17600.

Nifty (23721.30, +0.78%) has risen well and keeps intact our view of seeing 23800-24000 on the upside. Thereafter a corrective fall to 23500 is possible.

Nikkei (39739.50, +1.36%) has risen sharply, breaking above 39300. A rise towards 40000-41000 looks possible.

Shanghai (2940.05, -0.34%) has dipped below 2950. A test of 2930-2900 looks likely before a bounce back can happen towards 2950-2970.

Crude prices have fallen back contrary to our bullish outlook and might dip some more from here. Gold, Silver, Copper and Natural gas have come down as expected and look further bearish for the near term.

Brent ($ 84.31) has dipped towards $ 84 failing to sustain above $ 85. If the fall sustains below $ 85, a dip towards $ 83-82.50 might be seen. This will reduce the chances of seeing a rise towards $ 87.50-90.00 that we had mentioned yesterday.

WTI ($ 80.17) has dipped towards $ 80 failing to rise past $ 82. It might break below $ 80 and dip towards $ 78. That will reduce the chances of rise towards $ 82.50-85.

Gold (2325.80) has dipped towards 2320. It can fall towards 2300. We expect the 2400-2300 to persist for a while. A decisive break below 2300 is needed for further bearishness towards 2250-2200.

Silver (28.78) has fallen to 28.70 as expected. It looks vulnerable to break below 28.70 and fall towards 27.

Copper (4.3560) has broken the 4.6-4.4 range on the downside in line with expectations. A fall towards 4.24/4.20 looks possible in the near term while below 4.4.

Natural Gas (2.8590) has fallen back towards 2.83 as the mentioned resistance at 2.95-3.00 has held well. It can dip further towards 2.8-2.7.

14:00 19:30 US New Home Sales
Expn 664K … Expected 650K … Previous 634K

Data Yesterday
…………..
12:30 18:00 CA Inflation Y/Y
Expn – … Expected – … Previous 2.7% …Actual 2.9%

13:00 18:30 US Case Schiller
Expn 7.0% … Expected 7.0% … Previous 7.47% …Actual 7.20%

14:00 19:30 US Cons Conf
Expn 103.7 … Expected 100.2 … Previous 101.30 …Actual 100.4