Dollar Index strengthened yesterday and needs to sustain above 104.50 to rise towards 105. Euro on the other hand has come down towards 1.08. A break below 1.08, can trigger a fall towards 1.0750-1.0700. While the pairs USDCNY, USDJPY and EURJPY sustain above 7.25, 152 and 164 respectively, the outlook continues to remain bullish in the near term. 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 can see a gradual rise towards 83.90 in the coming weeks while EURINR needs to rise past 91 to turn bullish. Watch out for US Case Schiller and Consumer Confidence data scheduled today and FED and BoJ policy meetings on Wednesday which can keep the currencies volatile.

Dollar Index (104.618) strengthened yesterday as the markets prepares for the FED and Bank of Japan’s policy announcements on Wednesday. Now the index needs to sustain above 104.50 to head towards 105 on the upside. Watch out for US Case Schiller and Consumer Confidence data scheduled today.

EURUSD (1.0817) seems to be holding well below our mentioned resistance of 1.0870/80 as a test to 1.0869 was seen before it fell to the low of 1.0803. Currently it looks stable above 1.08 but still the caution remains for a fall towards 1.0750-1.07 if a rise past 1.0880 is not seen.

Dollar-Yen (154.01) and EURJPY (166.59) had risen well yesterday. Overall, while their respective supports at 152 and 164 hold, a bounce back towards 156+ and 168-170 could be seen in the medium term. The Dollar Yen will have to decisively break below 152 to drag itself lower towards 150 and to negate our expected rise from here.

USDCNY (7.2625) has support around 7.25, above which it is likely to head towards 7.27/28 in the medium term. At the same time, any break below 7.25 could make the pair vulnerable to a fall to 7.20 or even lower in the medium term.

Aussie (0.6547) and Pound (1.2851) need to rise past 0.66 and 1.29 to become further bullish in the near term. Until then, we cannot fully rule out the possibility of seeing a fall towards 0.64 and 1.28 respectively.

USDINR (83.7325) observed a high of 83.7375 today before closing slightly below it. While above 83.65, our view remains intact to see a rise towards 83.90. Note, the target which we have mentioned can be achieved gradually over the coming weeks. Any sudden volatility can come in post the FOMC meet scheduled on 31-Jul-24, till then it can continue to trade above 83.65.

EURINR (90.5744) started to decline from the high of 91 after failing its attempt to sustain higher. A break above 91 will be needed for it to become further bullish, else it is likely to fall back towards 90 in the near term.

The US Treasury yields remain lower but stable. The near-term view remains negative for the yields to fall further from here. The Fed meeting outcome tomorrow will be important to watch. The German yields have declined below their support contrary to our expectation. If this break sustains, our earlier bullish view will go wrong, and the yields can fall more. The 10Yr and 5Yr GoI are coming down in line with our expectation. They have more room to fall from here.

The US 10Yr (4.18%) and the 30Yr (4.43%) remains lower but stable. We repeat that the 10Yr can fall to 4.1% and lower while below 4.2% and the 30Yr to 4.3% on a fall below 4.4%.

The German 10Yr (2.35%) and the 30Yr (2.57%) yields have declined below their support at 2.4% (10Yr) and 2.6% (30Yr). While this sustains the yields can fall to 2.2% (10Yr) and 2.4% (30Y) in the coming weeks and will negate our earlier bullish view.

The 10Yr GoI (6.9184%) is coming down towards 6.9% as expected. It can test 6.85% on the downside and then see a bounce back to 6.9%.

The 5Yr GoI (6.83%) is coming down towards 6.8% as expected. Failure to bounce back after that can drag it down to 6.75%-6.7%.

Dow Jones has fallen a bit but has near term support which if holds, can lead to a rise towards 41000-41200. DAX to trade within 18000-18800 range with a bullish view. Nifty has dipped slightly. It has resistance overhead which can hold and lead to a corrective fall towards 24500. Nikkei has fallen back and looks vulnerable to see further fall while below 39000-39500. Shanghai remains bearish for the near term.

Dow (40539.93, -0.12%) fell but has risen back from the low of 40388. While above the support at 40300-40000, the bias is bullish to see 41000-41200 and even 42000 over the medium-term.

DAX (18320.67, -0.53%) has come down sharply from the high of 18546. But support at 18200-18100 can limit the downside and keep the bullish view intact to see 18600-18800. Overall a broad range of 18000-18800 might hold for some time.

Nifty (24,836.10, +0.01%) has come down from the high of 24999. There is room to test 25150-25200 after which a corrective fall to 24500 cannot be ruled out.

Nikkei (38,121.00, -1.03%) has fallen back after testing a high of 38719.70 yesterday. This keeps the chances alive to see a fall towards 37000-36000. Upside might be limited to 39000-39500.

Shanghai (2872.66, -0.66%) has declined below 2890. A fall towards 2850-2800 looks likely in the near term.

Crude prices are coming down towards their key immediate support, which if holds, can lead to a bounce back. Gold opened with a gap up above 2400 at 2430 due to change of contract and if the break sustains, a further rise towards 2460 could be seen. Silver and Copper have fallen back failing to rise past their resistance and may look to fall further from here. Natural gas continues to trade lower but the downside could be limited to 2.0/1.9.

Brent ($ 78.68) is coming down towards $ 78. If $ 78 holds, a rise towards $ 80 and then towards $ 83 could be seen. Only a decisive break below $ 78 can pull Brent further down towards $ 75.

WTI ($ 74.36) is heading down towards its key immediate support of $ 74. While that holds, a rise towards $ 76 and then towards $ 80 can be seen. Only a decisive break below $ 74, if seen, can drag the WTI down to $ 72-71.

Gold (2423.70) opened higher at 2430 today after yesterday’s fall to 2367 due to change of Aug-24 contract to Dec-24. While it sustains above 2400, a rise towards 2440-2460 might be seen. A broad range of 2400-2460 can hold for a while.

Silver (27.82) has declined as the resistance mentioned at 28.50 held well. While below 28.50-29.00, a fall towards 27 cannot be ruled out.

Copper (4.0520) has come down after testing 4.15. We reiterate that a fall towards 3.85-3.80 could be seen while it stays below 4.20. After that, a bounce back could be seen towards 4.3-4.4.

Natural Gas (2.0570) remains subdued but has managed to sustain above 2.00. As long as it holds above 2.0-1.9, chances of seeing a rise towards 2.4-2.5 remains intact.

23:30 05:00 JP Unemp
Expn 2.4% …Expected 2.4% …Previous 2.6%

13:00 18:30 US Case Schiller
Expn 6.9% …Expected 7.4% …Previous 7.2%

14:00 19:30 US Cons Conf
Expn 102.5 …Expected 99.8 …Previous 100.40

Data Yesterday
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No major data released yesterday