Market experts consider Powell’s speech as close to dovish and are leaning towards a possible rate cut by FED in September but the US CPI release today would be crucial to watch. A lower CPI release would increase market expectations of a September rate cut. The Dollar Index has dipped ahead of the US CPI today heading towards lower support near 104.75/50 while Euro is headed towards 1.0870/09. Dollar-Yen looks bullish towards 162, EURJPY has surpassed our target of 175 and if sustained, can extend its rise towards 177 in the near term. Aussie & Pound have surged on Dollar weakness and if sustained above the current levels, can head towards 0.68/6850 and 1.29/30 respectively in the near term. USDCNY is likely to continue to rise to 7.28 while above 7.27. EURINR has risen but could limit its upside to 91 from where a dip to 89.50-89 could be possible in the medium term. USDINR can continue to trade within its range of 83.40-83.50/60 in the near term.

The Dollar Index (104.93) declined slightly below 105 yesterday. Immediate support can be spotted around 104.75. While it holds, it can take the index higher within its near-term range of 104.50-106/106.50. Watch out for crucial US CPI release scheduled today. A reduced CPI would increase market speculation that the FED could be moving closer to a rate cut. A higher inflation figure would indicate otherwise.

EURUSD (1.0836) continues to trade above 1.08 and if the Dollar Index moves lower, Euro could head towards 1.0870/1.09 the near term before halting.

While Dollar-Yen (161.63) is hovering below our target of 162, EURJPY (175.15) has risen slightly above our expected level of 175. USDJPY needs to break past 162 to head towards 164 in the medium term. EURJPY if sustained above current levels, can head towards 177-180.

USDCNY (7.2713) has declined a bit from yesterday’s high of 7.2761. We may expect trade between 7.27-7.28 for the next few sessions.

Aussie (0.6757) and Pound (1.2859) trade higher on Dollar weakness ahead of the US CPI release due today. Aussie may rise towards 0.68/0.6850 while Pound has moved up strongly above 1.28 and could test 1.29/30 before halting for the near term.

USDINR (83.5250) has been trading within a very narrow range of 83.55-83.43 for the past few sessions. The pair can hold within a broader range of 83.60-83.40 for some time.

EURINR (90.4820) continues to trade higher but still, a sustained rise past 90.50 will be needed to test 91 on the upside. Overall, the range of 89-91 can persist for a while.

The US Treasury yields have dipped again. It keeps intact our view of seeing a fall to test their key support. The US CPI inflation data release today will be important to watch. The German yields sustain higher. The bullish view is intact. The yields have room to rise further from here. The 10Yr and 5Yr GoI have come down and are looking weak to fall more. While the 10Yr has an immediate support coming up, the 5Yr looks relatively much weaker to fall more.

The US 10Yr (4.29%) and the 30Yr (4.48%) yields have dipped back slightly. We retain our view of seeing a fall to 4.2% (10Yr) and 4.4% (30Yr) while yields remain below 4.4% (10Yr) and 4.6% (30Yr).

The German 10Yr (2.53%) and the 30Yr (2.69%) yields sustain higher. The bullish view is intact to see a rise to 2.8% (10Yr) and 3% (30Yr). Support is at 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.9754%) is coming down towards the 6.96%-6.95% support. A strong bounce is needed thereafter to take it towards 7% and avoid a deeper fall to 6.9% and lower.

The 5Yr GoI (6.9630%) has dipped below the support at 6.97%. While this break sustains, the yield can fall to 6.95%-6.9%. That will negate our view of seeing a rise above 7%.

Dow Jones has risen sharply and looks bullish towards 40000-40200 in the near term. DAX and Nifty to trade between 18000-18600 and 24000-24450 for a while before a breakout can be seen on the upside. Nikkei has dipped slightly after testing an all time high but still has scope to rise towards its key resistance before a corrective fall from there can be seen. Shanghai can rise towards 3000 while above 2900.

Dow (39721.36, +1.09%) has risen sharply breaking the 38900-39600 range on the upside as expected. While this break sustains, a rise to 40000-40200 can happen in line with our expectation.

DAX (18407.22, +0.94%) has risen back from the support at 18200. For now, 18000-18600 seems to be the broad trading range. While above 18000, the bias is positive to break 18600 and rise to 19000-19200.

Nifty (24324.45, -0.45%) had bounced, recovering some of the loss after a sharp intraday fall. Broadly the bias is bullish to see a rise to 24500-24700 while the Nifty sustains above 24000. For the near-term, 24000-24450 can be the trading range.

Nikkei (42258, +0.96%) has dipped slightly after testing a high of 42427. Immediate support is at 41000. While that holds, a rise to 43000-44000 is possible before a corrective fall can happen towards 41000-40000.

Shanghai (2964.35, +0.85%) continues to inch up after getting support at 2900. A rise towards 3000 looks possible. Thereafter a break above 3000 is needed to become further bullish towards 3050 or higher.

Crude prices have recovered but needs to rise past their immediate resistance to extend the rise towards their next key resistance. Gold, Silver and Copper appears range bound for a while. Natural gas is gradually falling towards 2.3 and could aim for 2.1-2.0 in the near term.

Brent ($ 85.86) bounced back after testing $ 84. It has to rise past $ 86-86.30 to avoid the danger of falling towards $ 83 and to clear the path for a rise towards $ 88-90.

WTI ($ 82.84) has bounced back after testing $ 79.99. A rise past $ 82 is needed to confirm further rise towards $ 84-85. Else could fall back towards $ 80-79.

Gold (2380.90) appears ranged between 2350-2400. As long as it holds above 2340, there are chances of rise towards 2450-2460 again in the near term.

Silver (31.21) looks mixed just now. A sideways range of 30.50-32.00 (revised from 30.50-31.50) can hold for a while before rising towards 33 eventually.

Copper (4.6050) appears ranged between 4.5-4.7. The fall to 4.5-4.4 that we had mentioned yesterday may or may not happen. But there are chances of break above 4.7 and rise towards 4.8-5.0 while it remains above 4.5-4.4.

Natural Gas (2.3330) is gradually falling towards 2.3. View remains bearish for a fall towards 2.1-2.0 before a potential rise towards 2.5 can take place.

1:30 07:00 CN CPI (YoY)
Expn – …Expected 0.4% …Previous 0.3%

1:30 07:00 CN PPI
Expn – …Expected -0.8% …Previous -1.4%

6:00 11:30 UK Trade Bal
Expn -18.5 (bln) …Expected -15.6 (bln) …Previous -19.6 (bln)

12:30 18:00 US CPI (MoM)
Expn 0.2% …Expected 0.1% …Previous 0.0%

12:30 18:00 US Core CPI (MoM)
Expn 0.2% …Expected 0.2% …Previous 0.2%

Data Yesterday
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No major data released yesterday.