Dollar Index may remain above 104 to target 105 while EURUSD has interim resistance at 1.0870/80, below which the pair can possibly test 1.08 soon. The pairs USDCNY, USDJPY and EURJPY have recovered well from the lows of 7.2193, 151.93, and 164.83 and the outlook appears bullish in the near term while the respective supports hold. The Aussie and Pound need to rise past 0.66 and 1.29 respectively to avoid a fall towards 0.6500-0.6400 and 1.28 on the downside. USDINR remained stable above 83.65 and can now be bullish towards 83.90 in the coming weeks while EURINR needs to rise past 91 to turn bullish. Crucial to watch the FOMC policy meeting this week, scheduled on 31st July 2024.

Dollar Index (104.166) remained stable above 104 on Friday and while above it the pair can attempt to rise towards 105 on the upside. Movement above 104 can be expected ahead of the FOMC scheduled on Wednesday.

EURUSD (1.0867) is nearing towards the interim resistance around 1.0870/80; failure to break past it can drag the pair to 1.08 or even lower in the near term.

Dollar-Yen (153.22) and EURJPY (166.49) have sustained well above their respective supports at 152 and 164. While these support hold, a bounce back towards 156+ and 168-170 could be seen in the medium term. Else the Dollar Yen will have to decisively break below 152 to drag itself lower towards 150.

USDCNY (7.2531) seems to be recovering well from its recent fall to 7.2105 on the downside. It needs to sustain above current levels to bring 7.27/28 back into the picture. Else, it could be vulnerable to a fall to 7.20 or even lower in the medium term.

Aussie (0.6559) and Pound (1.2885) have reversed from the low of 0.6513 and 1.2850 itself instead of testing 0.6500-0.6400 and 1.28 respectively. We are not fully ruling out the possibility of falling towards the mentioned targets as the immediate recoveries from recent lows could be short lived, unless a decisive break past 0.66 and 1.29 is seen.

USDINR (83.7325) remained stable above 83.65 on Friday. As a result, we are extending our bullish view towards 83.90 for the upcoming weeks. The volatility can come in post the FOMC meet scheduled on 31-Jul-24, till then it can continue to trade above 83.65.

EURINR (90.9780) is hovering below the level of 91, a break past which will be needed to avoid a fall towards 90.50 or lower in the near term. Watch price action closely around the current levels.

The US Treasury yields have declined sharply on Friday after the US PCE data release. The PCE for July came in at 2.51% (YoY) down from 2.6% in June. The Treasury yields can fall further this week. The US Fed meeting on Wednesday will need a close watch. The German yields are poised near their crucial supports which must hold to keep the uptrend intact. We will have to wait and watch. The 10Yr and 5Yr GoI have bounced back from their lows on Friday. But the broader trend remains down and any rise from here will be capped.

The US 10Yr (4.18%) and the 30Yr (4.43%) has come down further. The 10Yr can dip to 4.1% and lower while below 4.2%. The 30Yr on the other hand, can fall to 4.3% on a fall below 4.4%.

The German 10Yr (2.40%) and the 30Yr (2.62%) yields remain lower but stable. The supports at 2.4% (10Yr) and 2.6% (30Yr) have to hold to keep the uptrend intact for a rise to 2.8% (10Yr) and 3% (30Yr) and avoid a fall. We will have to wait and see.

The 10Yr GoI (6.9419%) has risen back from the low of 6.9266%. Though a bounce to 6.96%-6.98% is possible, the broader trend will remain down to see 6.9% and lower levels.

The 5Yr GoI (6.8412%) fell to 6.8167% and then has risen back. The view remains bearish to see 6.8% and lower levels in the coming days.

Dow Jones has risen back sharply above 40500. This has reduced the danger of falling and it may look to rise further while above 40000. DAX can rise towards 18600-18800. Nifty has surged, breaking above 24500 and is likely to test key resistance ahead, which if holds, can lead to a fallback. Nikkei has bounced back sharply but might face rejections from 39000-39500. Shanghai remains subdued and looks bearish for a fall towards 2850-2800 in the near term.

Dow (40,589.34, +1.64%) has risen sharply on Friday thereby reducing the danger of falling below 39800. A strong follow-through rise from here can take it up to 41000-41200. It will also keep the upside open to see 42000.

DAX (18417.55, +0.65%) is getting the follow-through rise. That keeps the bias positive to see 18600-18800 on the upside now. A break above 18800 can take it up to 19300-19500 eventually.

Nifty (24,834.85, +1.76%) has surged above 24500. The view is bullish to see 25150-25200. The price action thereafter will need a close watch. Support will now be around 24500.

Nikkei (38644.28, +2.59%) has risen back sharply from a low of 37611 but could face resistance at 39000-39500. While 39000-39500 holds, a fall towards 37000-36000 cannot be negated.

Shanghai (2888.30, -0.09%) is hovering below 2900. View remains bearish to see a fall towards 2850-2800 in the near term.

Crude prices have fallen back sharply and are likely to test key immediate support before a bounce back can happen. Gold, Silver and Copper have risen further but have resistance overhead which they need to overcome to strengthen the bullish case or else could witness a fallback. Natural gas sustains above 2.0 and while above it, the broader view will remain bullish.

Brent ($ 80.38) has fallen back sharply towards $ 80 contrary to our view to see a rise towards $ 84. It may test $ 78 on the downside before a bounce back can happen towards $ 83-84. Failure to hold above $ 78 can drag it down to $ 75.

WTI ($ 77.14) could not rise towards $ 82 as expected. Instead it has fallen towards $ 76. It may test $ 74 before a bounce back towards $ 80 can be seen. In case a decisive break below $ 74, if seen, can drag the WTI down to $ 72-71.

Gold (2394.10) has risen towards 2400 contrary to our view to see a fall towards 2320-2300. If 2400 holds, a fall towards 2320 cannot be ruled out. Else it may rise further towards 2440-2460.

Silver (28.16) has moved up further but has immediate resistance at 28.50-29.00. While these holds, a fall towards 27 cannot be ruled out.

Copper (4.1290) is inching up towards 4.2. It has to rise past 4.2 to become bullish towards 4.4. Else it can fall to 3.85-3.80 and then bounce back towards 4.3-4.4.

Natural Gas (2.09) has managed to sustain above 2.00. As long as it holds above 2.0-1.9, chances of rise towards 2.4-2.5 in the near term remains intact.

No major data release today

Data Yesterday
…………..
12:30 18:00 US Personal Income
Expn 0.37% …Expected 0.4% …Previous 0.48% …Actual 0.21%

12:30 18:00 US PCE
Expn 0.11% …Expected 0.2% …Previous 0.03% …Actual 0.08%

12:30 18:00 US Core PCE Price Index M/M
Expn 0.2% …Expected 0.3% …Previous 0.13% …Actual 0.18%