The first round of French Election results led the Euro to rise past 1.07 and the Dollar Index to slip below 106. Dollar-Yen and EURJPY are headed towards 162 and 173/174 respectively and can see bullishness in the absence of any intervention from the BOJ. Aussie & Pound continue to trade sideways within 0.6580-0.6720 and 1.26-1.28 respectively. USDCNY can still rise towards 7.28 while above 7.26. EURINR can trade within 89.00-90/91 region for some time. USDINR can continue to trade within its range of 83.67-83.40/30 in the near term. Watch out for US ISM manufacturing data release scheduled today.

Marine Le Pen’s far-right National Rally (RN) party won the first round of France’s parliamentary elections, leading EURUSD (1.0752) to rise sharply past 1.07. Overall, a range of 1.0650-1.0750/08 can hold.

The expected rise to 106.30/50 in the Dollar Index (105.592) did not happen and instead it reversed from 106.126 itself after Euro strengthened on positive results in the France elections. While the resistance holds, a fall back towards 105.50-105.00 might be seen.

Dollar-Yen (160.90) and EURJPY (173.02) tested 161.18 & 173.22, in line with our expectations. If the Yen weakens further, then a test of 162 on USDJPY and 174 on EURJPY would look more likely. Absence of intervention from BOJ could let the pairs continue bullishness in the coming weeks.

USDCNY (7.2673) can see a slow rise towards 7.28 in the medium term, while above 7.26. Overall, the view remains bullish for the near term.

Aussie (0.6669) and Pound (1.2659) can continue to trade higher 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 ranges.

USDINR (83.3875) on the offshore markets is currently trading near the lower end of 83.67-83.40/30 range. We expect the range to hold before heading towards 83.70-83.80 in the medium term.

EURINR (89.6470) continues to remain volatile 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 sharply on Friday. If this bounce sustains, a further rise is possible this week to test their resistance. The price action thereafter will need a close watch. The US PCE for June dipped to 2.56% (YoY) from 2.68% in May. The German yields are moving up in line with our expectation. The outlook is bullish and more rise can be seen from here. The 10Yr and 5Yr GoI are inching higher in line with our expectation. They can rise further this week.

The US 10Yr (4.39%) and the 30Yr (4.56%) yields have risen sharply. A rise to 4.5% (10Yr) and 4.6% (30Yr) looks possible now if this sustains. Thereafter we need to see if the yields are reversing lower again or not. The fall to 4.2%-4.1% (10Yr) and 4.35%-4.25% (30Yr) is not happening now.

The German 10Yr (2.49%) and the 30Yr (2.69%) yields are moving up as expected. The yields can test 2.6% (10Yr) and 2.8% (30Yr). Support at 2.4% (10Yr) and 2.55% (30Yr) have held very well.

The 10Yr GoI (7.0095%) and the 5Yr GoI (7.0005%) are moving up in line with our expectation. Our view of seeing a rise to 7.05%-7.06% remains intact. Support is at 6.95% (10Yr) and 6.97% (5Yr).


Dow Jones, DAX and Shanghai looks range-bound. Nifty has dipped a bit from its all time high of 24174. It has to rise past 24200 to strengthen the bullish momentum. Else can witness further fall from here. Nikkei continues to rise and remains bullish for the near term.

Dow (39118.86, -0.12%) is stuck between 38900 and 39600. While above 38900 the bias is bullish to see 40000-40100 on the upside.

DAX (18235.45, +0.14%) is still oscillating between 18000 and 18400. Need to wait for a breakout on either side to see if the DAX can go up to 18600-18800 or fall to 17700-17600.

Nifty (24010.6, -0.14%) has come down from a high of 24174. A further fall from here can take it down to 23500. A rise above 24200 is needed to see 24500 on the upside. Wait and watch.

Nikkei (39649.50, +0.23%) is gradually inching up towards 40000. It may rise further towards 41000 in the near term while above 39000.

Shanghai (2965.11, -0.08%) looks mixed and ranged between 2930-3000. It has to sustain above 2930-2900 and rise past 3000 to become bullish towards 3050.


Crude prices appears range bound. Gold, Silver and Copper have resistance overhead. Gold can trade sideways below its resistance for a while. Whereas Silver and Copper would remain vulnerable to a fall while the resistance holds. Natural Gas has dipped towards 2.50 which if holds, can produce a short term rise towards 2.70-2.75.

Brent ($ 85.37) looks range bound between 83.50-86.00. It has to rise past 86 to strengthen the bullish case and rise towards $ 88-90.

WTI ($ 80.98) appears ranged between $ 79.50-82. A rise past $ 82 is needed to become bullish towards $ 84-85.

Gold (2336.60) rose to test 2351 last Friday and has dipped slightly from there. Immediate resistance is seen at 2360. While that holds, narrow range of 2360-2300 can hold for some time within a broad range of 2300-2400.

Silver (29.40) rose to 29.96 last Friday before coming off below 29.50 from there. Resistance is at 30. While that holds, a fall towards 27.50-27.00 cannot be ruled out in the near term.

Copper (4.3795) lacks strength to rise past 4.4. Resistance is now at 4.4-4.5, while below which, the view remains bearish for a fall towards 4.24/4.20 in the near term.

Natural Gas (2.5720) fell to a low of 2.5410 in line with expectations for a fall towards 2.6-2.5 and has bounced a bit. If 2.5 holds, a short term rise towards 2.70-2.75 can be seen. But in the medium term a break below 2.5 and fall towards 2.3-2.0 cannot be ruled out.


23:50 05:20 JP Tankan Large Manufacturers Index
Expn – … Expected 11 … Previous 11

0:30 06:00 JP PMI
Expn 51.0 … Expected 50.1 … Previous 50.4

1:45 07:15 CN PMI
Expn 52.1 … Expected 51.5 … Previous 51.7

5:00 10:30 IN Manufacturing PMI
Expn 57.8 … Expected 58.5 … Previous 57.5

7:30 13:00 CH PMI
Expn 49.8 … Expected 45.2 … Previous 46.4

8:00 13:30 EU PMI
Expn – … Expected 45.6 … Previous 47.3

8:30 14:00 UK PMI
Expn 51.5 … Expected 51.4 … Previous 51.2

14:00 19:30 US Manufacturing ISM
Expn 49.3 … Expected 49.2 … Previous 48.7

Data Yesterday
23:30 05:00 JP Unemp
Expn 2.5% … Expected 2.6% … Previous 2.6% …Actual 2.6%

6:00 11:30 UK GDP
Expn – … Expected -0.3% … Previous -0.1% …Actual -0.3%

12:30 18:00 US Personal Income
Expn 0.4% … Expected 0.4% … Previous 0.3% …Actual 0.5%

12:30 18:00 US PCE
Expn 0.2 … Expected 0.3 … Previous 0.3 …Actual 0.0

12:30 18:00 US Core PCE Price Index M/M
Expn 0.2% … Expected 0.1% … Previous 0.3% …Actual 0.1%

12:30 18:00 CA GDP
Expn – … Expected 0.3% … Previous 0.0% …Actual 0.3%