The Dollar Index tested 106.13 as the Euro weakened below 1.07 after the ECB council meeting and on remarks of more rate cuts by ECB chief economist. Euro could test 1.0650 or even 1.06 going forward. Dollar-Yen and EURJPY are attempting to rise towards 161/162 and 172 respectively and can see bullishness on the absence of any intervention from the BOJ. Watch price action closely around the current levels. Aussie & Pound continue to trade sideways within 0.6580-0.6720 and 1.26-1.28 respectively. USDCNY is bullish towards 7.28. EURINR can trade within 89.00-90/91 region for some time. USDINR tested 83.61 yesterday before cooling down. Overall, a range of 83.67-83.40 is likely to hold in the near term. USDINR could move up if the Euro weakness further from current levels. US GDP data release would be important to watch today.

Slightly higher than expected US Consumer Confidence data release at 100.4 kept the Despite the softer than expected US New Home Sales data release at 619, the Dollar Index (105.665) rose sharply to test 106.13 on the upside on Euro weakness before cooling down. A rise to 106.50 or higher cannot be ruled out in the near term. Watch for price fluctuation post US GDP data release today.

EURUSD (1.0690) slipped below 1.07 after the ECB governing council member Olli Rehn told Bloomberg that two more cuts this year seemed reasonable. After a lower-than-expected German GfK consumer sentiment survey yesterday, ECB chief Economist Philip Lane also stated that if baseline holds up, there would be more rate cuts. Immediate support can be spotted around 1.0650 above which, a narrow range of 1.0750-1.0650 can hold. However, there could be chances of a downside extension to 1.06 as well.

Dollar-Yen (160.45) has exceeded our target of 160 while EURJPY (171.51) tested 171.80 on the upside. If the Yen weakens further, then a test of 162 on USDJPY and 172/173 on EURJPY would look more likely. Caution still remains to see whether any intervention comes in from the BOJ to protect Yen against the fluctuations or not. 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. Absence of intervention from BOJ could let the pairs continue bullishness in the coming months.

USDCNY (7.2680) has risen well 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 (0.6653) and Pound (1.2627) 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 (83.5750) failed to dip below 83.40 and instead moved up to test 83.61 before closing at 83.5750. A strong break past 83.60/67 is needed to become bullish towards 83.70-83.80, until then an immediate range of 83.60/67-83.40 may hold in the near term.

EURINR (89.3026) is currently trading lower 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. Else the range is likely to persist for a while.

The US Treasury yields have risen back sharply. A further rise from here will negate our view of seeing a fall to test their supports. The US GDP data today and US PCE numbers tomorrow are important to watch. The German yields are rising well from their support as expected. While this sustains, a further rise is possible in the coming days. The 10Yr and 5Yr GoI are inching up in line with our expectation. They have room to rise further going forward.

The US 10Yr (4.34%) and the 30Yr (4.47%) yields have risen back sharply. If this bounce sustains a further rise to 4.5% (10Yr) and 4.6% (30Yr) can be seen. That will negate the chances of the fall to 4.2%-4.1% (10Yr) and 4.35%-4.25% (30Yr) that we were expecting.

The German 10Yr (2.45%) and the 30Yr (2.64%) yields are rising well from their support at 2.4% (10Yr) and 2.55% (30Yr). While above these support the yields can rise further to 2.6% (10Yr) and 2.8% (30Yr) from here.

The 10Yr GoI (6.9879%) and the 5Yr GoI (6.9987%) are inching up as expected. We reiterate that the yields can break 7% and rise to 7.05% (10Yr) and 7.1% (5Yr). Support is at 6.95% (10Yr) and 6.97% (5Yr).

Dow Jones has managed to hold above its support and while above it, there could be chances of rise in its coming sessions. DAX is stuck between 18400-18000. While below 18400, it would remain vulnerable to a break on the downside and fall further. Nifty continues to rise and has scope to test its key resistance overhead before a corrective fall can be seen. Nikkei has fallen back but downside seems limited to 38500-38000. Shanghai has to break above 3000 to turn bullish. Else could be ranged between 2900-3000 for a while.

Dow (39127.80, +0.04%) is managing to hold above 39000. As mentioned yesterday, 39000 and 38800 are good support while above which a rise to 40000-40100 will still remain alive. Only a break below 38800 will increase the danger of the fall to 38000.

DAX (18155.24, -0.12%) hovers above 18000. While below 18400, the DAX will remain vulnerable to break 18000 and fall to 17700-17600.

Nifty (23868.80, +0.62%) continues to move up and keeps intact our view of seeing 24000 on the upside. Thereafter a corrective fall to 23500 is possible.

Nikkei (39297.50, -0.99%) has fallen sharply from a high of 39788.63. Key Support is at 38500-38000. As long as that holds, a rise towards 40000-41000 is still possible.

Shanghai (2950.25, -0.75%) is oscillating around 2950. It has to hold above 2930-2900 and rise past 3000 to reduce the downside pressure and to rise towards 3050. Else it may trade within 2900-3000 for a while.

Crude prices, Copper and Natural Gas remains bearish for the near term. Gold has fallen as expected. It has to break below 2300 decisively to become further bearish. Else it may continue to be range bound within 2300-2400 for a while. Silver has bounced a bit but broader outlook is still tilted towards bearishness.

Brent ($ 84.19) can dip towards $ 83-82.50 while below $ 85.

WTI ($ 79.82) can fall towards $ 78 while below $ 82.

Gold (2308.60) has fallen towards 2300 as expected. A decisive break below 2300, if seen, can drag the Gold down to 2270-2250-2200. Else it may continue to trade sideways between 2300-2400 for a while.

Silver (29.09) bounced back above 29 after testing 28.58. Resistance is seen at 29.50/55 and then at 30. While that holds, a fall towards 27.50-27.00 cannot be ruled out in the near term.

Copper (4.3605) trades lower below 4.4. Resistance is at 4.47-4.50, while below which, the view is still tilled towards bearishness towards 4.24/4.20.

Natural Gas (2.7430) has fallen towards 2.7 as expected. A further dip towards 2.6-2.5 can be seen while below 2.8-2.9.

9:00 14:30 EU Biz Climate
Expn 95.3 … Expected 96.3 … Previous 96.0

12:30 18:00 US Durable Goods Orders
Expn 1.0% … Expected -0.1% … Previous 0.6%

12:30 18:00 US GDP
Expn – … Expected 1.4% … Previous 1.2%

Data Yesterday
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14:00 19:30 US New Home Sales
Expn 664K … Expected 650K … Previous 698K …Actual 619K