Dollar Index may rise towards 105 while EURUSD could fall towards 1.08. USDJPY and EURJPY appears to be bearish towards 152 and 168-166 respectively. USDCNY can soon test 7.28 in the near term before topping out. The Aussie and Pound, if continues to fall further, can test 0.6550-0.6500 and 1.2850/28 on the downside. USDINR moved up to test 83.7125 post the Union Budget 24-25 but we expect the resistance at 83.70/80 to hold and lead to a fall back from there. EURINR looks bearish for a break below 90.75 and fall towards 90.50.

Dollar Index (104.51)  has moved up to around 104.50 despite a lower than the previous Existing Home sales data release at 3890 (4110, May-24). The expectations of a Trump presidency in US supported such rise in Dollar. A strong break above 104.50 can lead to a further rise towards 105.

EURUSD (1.0843) has fallen breaking below the support at 1.0850. This has negated the chances of seeing a rise towards 1.0950/1.10 there we were expecting earlier. It may come down further to 1.08 from here.

Dollar-Yen (155.41) is nearing towards the initial mentioned target of 155 as the senior member of the Japanese government gave more clarity on interest rate hikes by the BOJ. Markets speculates rate hike by 10 bps and if that happens, the pair can test 152 in the coming sessions.

EURJPY (168.53) fell sharply even below our expected level of 169 as the Yen strengthened on getting more clarity on the upcoming rate hike. While it remains below 172, view remains bearish towards 168-166 in the near term.

USDCNY (7.2751) continues to trade above 7.27. We expect the pair to soon test 7.28 on the upside. Thereafter, if the resistance holds, a corrective fall towards 7.26/7.25 could be seen.

Aussie (0.6604) continues to fall and has come down towards 0.66 as its major trading partner China lowered interest rates on Monday by 10 bps to 3.85% and some overnight sell-off was seen in commodities, thereby raising tension on whether China will find its way out of slow growth period or not. Failure to bounce back from 0.6600 would make it vulnerable for a further fall to 0.6550-0.6500.

Pound (1.2891) has been gradually coming off since the last few sessions. Further if the fall continues, can get extended to 1.2850-1.2800 in the near term.

USDINR (83.6925) in line with our bullish view, tested 83.7125 post the Union Budget 2024-25 speech. Resistance is seen at 83.70/83.75, while below which a fall towards 83.60/50 could be seen. Any break above 83.75, if seen, would extend the rise to 83.80 and then fall back from there. We are not looking for a rise above 83.80 just now.

EURINR (90.75) is coming down towards 90.75 and looks vulnerable to dip further towards 90.50. Thereafter we need to see if it bounces back or continues to fall towards 90.

The US Treasury yields have risen further at the far end while at the near-end, the 2Yr has declined sharply. The bounce from the support on the far-end yields is sustaining well and they can move up further. The 2Yr has limited room to fall from here. It has a strong support coming up from where it can also rise back. The German yields continue to move up in line with our expectation. The bullish view is intact, and the yields can rise further in the coming days. The 10Yr and 5Yr GoI remain vulnerable to fall more from here.

The US 10Yr (4.25%) and the 30Yr (4.48%) yields are higher but stable while the 2Yr (4.45%) has come down sharply from around 4.52%. The 10Yr and 30Yr can rise to 4.3%-4.35% (10Yr) and 4.5%-4.55% (30Yr) respectively. The 2Yr has limited room to fall from here to 4.4%-4.38%. Thereafter it can also rise back.

The German 10Yr (2.43%) and the 30Yr (2.63%) yields have come down sharply. 2.4% (10Yr) and 2.6% (30Yr) are key supports while above which the bullish view of seeing a rise to 2.8% (10Yr) and 3% (30Yr) will remain intact.

The 10Yr GoI (6.9695%) settled stable after a volatile session. View remains bearish to see 6.94% and 6.9% on the downside.

The 5Yr GoI (6.9094%) has dipped again. View remains bearish to break 6.9% and fall to 6.8%. An intermediate bounce to 6.94%-6.96% cannot be ruled out before that fall.

Dow Jones lacks a follow through rise and that makes it vulnerable to break below 40200 and fall towards 39500. DAX indeed moved up further and can rise towards 18800. Nikkei has come down towards its key support at 39000, which is expected to hold and produce a bounce back from there. Nifty fell sharply to 24074 yesterday post the Union Budget 24-25 but has recovered well from there and might extend the recovery further. Shanghai is attempting to break below the lower end of the 2900-3000 range and looks vulnerable to fall towards 2850-2800 in the coming weeks.

Dow (40358.09, -0.14%) seems to be struggling to breach 40500. That keeps it vulnerable to break 40200 and fall to 39500. We will have to wait and watch.

DAX (18557.70, +0.82%) has risen further. As mentioned yesterday it can rise to 18600-18800.

Nifty (24,479.05, -0.12%) has recovered well from the low of 24074. A strong follow-through rise from here can take it up to 24800-24850 again. While above 24000 the bias will remain positive.

Nikkei (39404.00, -0.57%) has come down near the crucial support of 39000. While 39000 holds, a bounce back towards 41000 is possible. Only a break lower, if seen, would be vulnerable for a further fall towards 38000.

Shanghai (2896.21, -0.66%) is attempting to break below the lower end of the 2900-3000 range. It might fall towards 2850-2800 in the coming weeks.

Crude prices have scope to fall towards their key support before a bounce back can happen. Gold has moved up further while Silver has recovered a bit. Both precious metals have to rise past their resistance at 2425-2430 and 29.80-30.00 to become bullish or else a fallback cannot be ruled out. Copper continues to fall and looks bearish towards 4.00. Natural gas has fallen but the broader view will remain bullish while above the support at 2.00.

Brent ($ 81.34) is heading down towards $ 80 as expected. It may fall further towards $ 78 before a bounce back towards $ 83-86 can be seen.

WTI ($ 77.30) continues to dip and can test $ 75-74 before a bounce back can be seen towards $ 80.

Gold (2403.70) is moving up towards 2420. Immediate resistance is now seen at 2425-2430 region. While that holds, a fall 2380-2360 cannot be ruled out. A break above 2430 is needed to open doors towards 2460. There has been a sharp fall in MCX Gold (68510) yesterday, possibly due to reduction of import duty from 15% to 6%.

Silver (29.34) has risen back after testing a low of 28.83. It has to rise past 29.80-30.00 to reduce the downside pressure and to become bullish towards 31-31.50. Else a fall towards 28.50/30 cannot be ruled out.

Copper (4.1585) continues to drift lower and looks vulnerable to a fall towards 4.0.

Natural Gas (2.1430) has fallen back from a high of 2.2650. But bias will remain positive to see a rise towards 2.4-2.5 in the near term as long as it holds above 2.0.

14:00 19:30 US New Home Sales
Expn 586K …Expected 643K …Previous 619K

14:00 19:30 BOC Meeting
Expn – …Expected 4.50% …Previous 4.75%

Data Yesterday
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14:00 19:30 US Existing Home Sales
Expn 4105K …Expected 3990K …Previous 4110K …Actual