The Dollar Index has risen well and has the further scope to test 103.50 before topping out. Euro below 1.10 can fall back towards 1.09-1.0850 in the near term. The USDJPY and EURJPY has risen well and can test 150 and 165 on the upside before resuming their downtrend in the medium term. Pound and Aussie have risen past 1.28 and 0.66 respectively but needs to be cautious around current levels. USDCNY looks stable above 7.17 for now and if sustained, can test 7.20 in the near term as well. EURINR below 93 is likely to fall back towards 92-91.50 in the coming sessions. USDINR was closed yesterday but overall the pair is likely to move within 83.80-84.00/84.10 region for sometime.

Dollar Index (102.92) has risen well from the mentioned support around 102 as the retail sales MoM rose by 1% and unemployment claims came less than expected at 227k (236K). The Index if sustained above current levels, can head towards 103.50 in the near term before possibly topping out. Overall, a range of 102-104 can hold for some time.

EURUSD (1.0980) failed in its attempt to see a sustained rise past 1.10 and declined back from the high of 1.1015. Currently it is hovering below the mentioned resistance around 1.10 and unless a decisive break is seen, a fall back to 1.09-1.0850 can be seen in the near term.

Dollar-Yen (148.83) and EURJPY (163.42) exceeded past our mentioned levels of 148/148.50 and 162/163 respectively. Immediate resistance can be spotted around 150 and 165 respectively. Further if the rise continues, the pairs can test these levels in the near term before possibly topping out. Our overall view continues to remain bearish to 145 and 158/157 in the medium term.

The USDCNY (7.1735) indeed bounced back higher yesterday on Dollar strength. Now, the pair needs to hold well above the level of 7.17 in order to head towards 7.20 in the near term. Failure to do so can again bring him back towards the lower end of our broad mentioned range of 7.14-7.20.

Aussie (0.6622) and Pound (1.2873) looks stable above 0.66 and 1.28 respectively for now. Whether the test to 0.6650-0.67 and 1.29-1.30 respectively happens or not will have to be seen. Watch price action closely around the current levels. Failure to further move up can drag them back towards 0.65 and 1.27 respectively in the medium term.

USDINR (83.9525) was closed yesterday in the onshore markets on the account of Independence Day. For now, the pair can trade within 83.80-84.00/84.10 range for some time.

EURINR (92.18) seems to be holding well below the mentioned resistance of 93. While it holds, the pair is likely to fall back towards 92-91.50 in the near term.

The US Treasury yields have come down failing to sustain the bounce seen on Wednesday. The broader view remains bearish, and the yields can continue to fall from here. The US Headline CPI data on Wednesday showed that the inflation rose by 2.92% (YoY) in July down from 2.98% in June. Slowing inflation strengthens the case of a rate cut next month and is weighing on the yields. The German yields have risen back but are likely to be short-lived. The broader trend is down, and the yields can resume the fall in the coming days. The 10Yr GoI is at the lower end of its range. The bias is negative to break the range on the downside and fall.

The US 10Yr (3.91%) and the 30Yr (4.17%) yields have come down again after rising on Wednesday. We expect the yields to fall back to 3.85% (10Yr) and 4.1% (30Yr) while below 4% (10Yr) and 4.3% (30Yr). Eventually the yields can fall to 3.5% (10Yr) and 3.8% (30Yr) over the medium-term.

The German 10Yr (2.26%) and the 30Yr (2.47%) yields have risen back but are unlikely to sustain. We expect the yields to turn down again and resume the fall to 2% (10Yr) and 2.2% (30Yr) going forward. Resistances are at 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.8580%) is at the lower end of its 6.85%-6.9% range. We retain the bearish bias to see a break below 6.9% and a fall to 6.8%-6.75%.

Dow Jones, DAX, Nikkei and Shanghai have risen sharply after strong US economic data release. The lower than expected US Unemployment Claims and Higher US Retail Sales helped in easing the recession fears and boosted stocks. Nifty may bounce back today taking cues from Global equities. Shanghai and Nikkei have risen sharply but they might face rejections at 2900 and 38000.

Dow (40563.06, +1.39%) has surged above 40000 and has negated our view of reversing lower. While this sustains, 40900-41000 can be seen on the upside. 40400 and 40000 will now be good supports.

DAX (18183.24, +1.66%) has come up towards 18200 as expected. A strong rise past 18200 is needed to move up towards 18500 and negate the fall to 17000-16800 that we have been mentioning.

Nifty (24143.75) can open with a gap-up taking cues from the global markets. The 24000-24500 range is intact. We prefer to remain cautious for a break below 24000 and a fall to 23500-23300 as long as the Nifty stays below 24500.

Nikkei (37,810.00, +3.00) has broken above the resistance at 37000 contrary to our view to see a fall towards 35000. Next key resistance is seen at 38000. It has to rise past 38000 for increased bullishness towards 39000-40000. Else could fall back towards 37000-36000.

Shanghai (2857.28, -0.35%) bounced back sharply after testing a low of 2839 but could face rejections at 2900. While 2900 holds, it may fall back towards 2825-2800.

Brent and WTI might trade within $ 79-82.50 (Brent) and $ 75-79/80 (WTI) for a while. Gold, Silver and Copper has scope to rise towards 2550-2600, 29.00-29.50 and 4.20-4.30 in the near term. Natural Gas may fall towards 2.1-2.0 if it fails to break above 2.30.

Brent ($ 80.92) fell to $ 79.60 in line with expectations for a fall towards $ 80-79 and has bounced back from there. A range of $ 79-82.50 may hold for some time.

WTI ($ 76.79) has declined below $ 77 but might get support at $ 76-75. A broad range of $ 75-79/80 might hold for some time.

Gold (2495.10) fell to 2469 yesterday but has recovered well from it. A rise towards 2550-2600 looks possible while above 2450. After that, a fall back might be seen towards 2500.

Silver (28.38) rose sharply to 28.58 yesterday in line with our expectation. It can rise further towards 29.0-29.5 in the near term.

Copper (4.1460) saw an rise to 4.1635 yesterday as expected. The rise can extend further towards 4.2-4.3.

Natural Gas (2.1650) saw a high of 2.30 before coming off from there. A sustained break above 2.25-2.30 is needed to see further rise towards 2.4-2.5. Else can fall back to 2.10-2.00.

9:00 14:30 EU Trade Bal
Expn – …Expected 14.5 …Previous 12.3

Data Yesterday
…………..
23:50 05:20 JP GDP
Expn – …Expected 0.6% …Previous -0.5% …Actual 0.8%

1:30 07:00 Australia Labour Force
Expn – …Expected 20.2K …Previous 52.3K …Actual 58.2K

6:00 11:30 UK Trade Bal
Expn -17.2 …Expected -16.0 …Previous -18.6 …Actual -18.9

8:45 14:15 IN Trade bal
Expn -19.5$ Bln …Expected – …Previous -21.0$ Bln …Actual -23.5$ Bln

12:30 18:00 US Retail Sales (MoM)
Expn -0.4% …Expected 0.4% …Previous -0.2% …Actual 1.0%

12:30 18:00 US Philifed Index
Expn 0.9 …Expected 5.6 …Previous 13.9 …Actual -7.0

13:15 18:45 US Industrial Production
Expn 0.1% …Expected -0.3% …Previous 0.3% …Actual -0.6%

13:15 18:45 US Capacity Utilization
Expn 79.0% …Expected 78.5% …Previous 78.4% …Actual 77.8

13:00 01:30 US TICS (Net foreign purch of long-term Sec)
Expn – …Expected 56.3 …Previous -54.1 …Actual 96.1