Dollar Index holds above 104 while Euro needs to sustain above 1.08, else can trigger a fall towards 1.0750-1.0700. USDJPY and EURJPY have slipped sharply to their respective supports around 152 and 164 respectively ahead of the BOJ policy meeting today. USDCNY has slipped below the support of 7.25 and if it does not move above 7.25 and sustain, it can fall back towards 7.20. 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 has potential to break past 83.75 and head towards 83.80/90 in the medium term. EURINR needs to rise past 91 to turn bullish. Watch out for FED and BoJ policy meetings today which can keep the currencies volatile for the rest of the week.

Dollar Index (104.394) tested 104.79 yesterday as the US case Schiller and Consumer Confidence came out stronger at 6.8% and 100.3 respectively. On the other hand, EURUSD (1.0826) had slipped slightly below 1.08 on Dollar strength but has recovered from there well. Dollar Index and Euro look stable above 104 and 1.08 just now but there could be volatility after the BOJ and FED policy statements scheduled today. Euro remains cautious for a fall towards 1.0750-1.07 if a rise past 1.0880 is not seen.

Dollar-Yen (152.75) and EURJPY (165.35) fell sharply near the supports around 152 and 164 respectively ahead of the BOJ meeting today. The pairs will need to necessarily break below the mentioned supports to become bearish. Else, a bounce back towards 156+ and 168-170 could be seen. Volatility is likely to be seen over the rest of the week.

USDCNY (7.2373) saw a gap down opening today below our expected support of 7.25. It has risen back well from the day’s low of 7.2266. Now, any further weakness in Dollar Index below 104 if seen, can trigger a fall in the pair towards 7.20. The pair will have to necessarily rise past 7.255 in order to bring 7.27/28 into the picture. Else, it would be vulnerable to test 7.20 or even lower in the medium term.

Aussie (0.6499) and Pound (1.2848) have been coming off and unless a rise past 0.66 and 1.29 is seen, the probability of seeing a fall towards 0.64 and 1.28 respectively is high in the near term.

USDINR (83.7325) was stable above 83.70 yesterday but has potential to rise past 83.75 to head towards 83.80/90 in the medium term. We expect the downside to be limited to 83.65/60. Note any sudden volatility can come in over the next 1-2 sessions after today’s FOMC meet.

EURINR (90.6597) needs a strong break above 91 to become further bullish, else it is likely to fall back towards 90 in the near term.

The US Treasury yields continue to fall as expected. They have room left to test their support and need to see if they are bouncing back after that or not. The US Fed meeting outcome tonight will need a close watch to see how it is going to impact the yields. The German yields are sustaining lower after breaking below their supports. While this break sustains, the outlook is bearish to see more fall from here. The 10Yr and 5Yr GoI have bounced back. A corrective rise looks possible in the near-term before the broader downtrend resumes.

The US 10Yr (4.14%) and the 30Yr (4.40%) yields continue to fall. The 10Yr is going down towards 4.1%. The 30Yr is at a support. A break below it can take it down to 4.35%-4.3%.

The German 10Yr (2.34%) and the 30Yr (2.56%) yields remain lower but stable. While the break below 2.4% (10Yr) and 2.6% (30Yr) sustains, our earlier bullish view will get negated, and the yields can fall to 2.2% (10Yr) and 2.4% (30Y).

The 10Yr GoI (6.9326%) has bounced back. While this sustains, a corrective rise to 6.96%-6.98% is possible before the downtrend resumes.

The 5Yr GoI (6.8437%) on the other hand can see a recovery towards 6.9% before it resumes the fall targeting 6.75%-6.7% on the downside over the medium term.

Decent bounce is seen in most of the equities. Dow Jones and DAX have scope to rise towards 41000-41200 and 18800. Nifty and Nikkei can fall towards 24500 and 37000/36000 if the resistance at 25000-25150/25200 and 39000 holds. Shanghai can rise to 2950 before falling back from there.

Dow (40743.33, +0.50%) continues to move up. This keeps intact our bullish view of seeing 41000-41200 first and then 42000 over the medium-term.

DAX (18411.18, +0.49%) has bounced. While above the 18200-18100 support zone, the near-term view is positive to see 18600-18800. Overall a range of 18000-18800 can hold for a while.

Nifty (24,857.30, +0.09%) is struggling to breach 25000 and is stuck between 24750 and 25000. While the upside is still open to test 25150-25200, a dip to 24500 is a possibility before a rise above 25000 happens. It is a wait and watch.

Nikkei (38278.00, -0.61%) struggles to rise past 38500. Key resistance is seen at 39000. While that holds, chances of fall towards 37000-36000 cannot be ruled out.

Shanghai (2902.04, +0.79%) has bounced back sharply from a low of 2865. It may rise towards 2950 before a fall back can be seen towards 2850-2800.

Crude prices sustain above their support level and while above it, a bounce back could be seen. Gold has risen sharply while Silver and Copper have bounced back well and look bullish to target 2500-2500, 29-30 and 4.20 from here. Natural gas is holding well above 2.0 and while above it, view remain bullish. The outcome of the FOMC meeting will be key to watch tonight.

Brent ($ 78.88) and WTI ($ 74.68) sustains above the support at $ 78 and $ 74. While the support holds, a rise towards $ 80 and then towards $ 83 could be seen in Brent and WTI can rise towards $ 76 and then towards $ 80. Only a decisive break lower, if seen, can drag the Brent and WTI down to $ 75 and $ 72-71 respectively.

Gold (2455.80) has risen towards the resistance at 2460. It looks likely to break above 2460 and rise towards 2500-2550. Downside could be limited to 2420.

Silver (28.64) has risen back sharply above 28.50 from a low of 27.77. It may rise towards 29.50 or even 30.00 before a fall back can be seen towards 29 or lower.

Copper (4.1190) saw a low of 4.03 before bouncing back from there to trade above 4.10. It may rise to 4.20. Thereafter we need to see if it breaks above 4.20 to target 4.3-4.4 or fall backs towards 4.0-3.85.

Natural Gas (2.13) surged above 2.10 after testing a low of 1.9910. Immediate support at 2.00 is holding well and while above it, a rise towards 2.4-2.5 looks possible.

1:30 07:00 AU CPI
Expn 3.6% …Expected 3.8% …Previous 3.6%

3:00 08:30 BOJ Meeting
Expn – …Expected 0.10% …Previous 0.10%

9:00 14:30 EU CPI Flash Estimate (YoY)
Expn 2.7% …Expected 2.5% …Previous 2.5%

12:15 17:45 US ADP Emp
Expn – …Expected 166K …Previous 150K

12:30 18:00 CA GDP
Expn – …Expected 0.2% …Previous 0.3%

18:00 23:30 US FOMC Meeting
Expn 5.50% …Expected 5.50% …Previous 5.50%

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

13:00 18:30 US Case Schiller
Expn 6.86% …Expected 6.50% …Previous 7.2% …Actual 6.81%

14:00 19:30 US Cons Conf
Expn 102.5 …Expected 99.8 …Previous 97.8 …Actual 100.30