The Dollar Index is currently nearing the lower end of its mentioned range of 104-102. Euro has risen past 1.10 but unless a strong bearishness in the Dollar Index below 102 is seen, the upside in the Euro could be limited. The USDJPY and EURJPY are holding well below 150 and 165 and further if the fall extends, a test to 145 and 160/158 could be seen in the near term. The pound and Aussie are headed towards 0.67 and 1.30 respectively. USDCNY can continue to move within a region of 7.18-7.12. EURINR is likely to fall back towards 92-91.50 in the coming sessions while below 93. USDINR is likely to move within 84.00/84.10-83.80 region for some time with an initial dip to 83.85/80 possible.

Dollar Index (102.344) fell sharply to a low of 102.39 on Friday as the US housing starts release came lower than expected at 1238k (1329k). Currently, the Index is moving towards the lower end of its range of 104-102. A break below 102, if seen will be bearish else a bounce back from 102 may keep it within the 102-104 range for some more time.

EURUSD (1.1030) has risen past 1.10 again on Dollar weakness. Going ahead, if Dollar Index bounces back from 102, then it would suggest limited upside for Euro and take it down towards 1.10/09-1.0850. Only a strong decline in Dollar Index below 102 can take Euro higher towards 1.11-1.12.

Dollar-Yen (147.35) and EURJPY (162.53) seem to be holding well below our mentioned resistance of around 150 and 165 respectively. Further, if the fall continue, they can get extended to 145 and 160-158 in the medium term.

The USDCNY (7.1508) could not sustain its rise past 7.17 and has come off sharply instead. The near-term outlook appears a bit indecisive, but for now we expect the broad mentioned range of 7.18-7.12 to remain intact for a while.

Aussie (0.6686) and Pound (1.2957) are nearing our mentioned targets of 0.67 and 1.30 respectively which can hold and produce a decline in the medium term.

USDINR (83.9450) on the offshore is currently trading lower at 83.85 and we expect the pair to trade within 84.00/84.10-83.80 region for the week with a possible dip to 83.85/80 initially.

EURINR (92.5429) is attempting to rise towards the mentioned resistance of 93 which if holds, can take the pair down towards 92-91.50 in the near term.

The US Treasury yields have come down further. The resistances have held well. The broader bearish view is intact, and the yields can fall more from here. The German yields are turning down again after a short-lived bounce. The downtrend is likely to resume now, and the yields can fall further. The 10Yr GoI is still stuck in a narrow sideways range within its overall downtrend. It is likely to break the range on the downside and fall further in the coming days.

The US 10Yr (3.89%) and the 30Yr (4.14%) yields are coming down towards 3.85% (10Yr) and 4.1% (30Yr) as expected. While below 4% (10Yr) and 4.3% (30Yr) the broader view is bearish to see 3.5% (10Yr) and 3.8% (30Yr) on the downside over the medium-term.

The German 10Yr (2.24%) and the 30Yr (2.46%) yields are turning down again as expected. The bearish view is intact for a fall to 2% (10Yr) and 2.2% (30Yr). Any rise can be capped at 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.8700%) continues to oscillate in the 6.85%-6.9% range. The bias is bearish to break 6.85% and a fall to 6.8%-6.75% eventually going forward.

Dow Jones and DAX have risen further and look bullish for the near term. Nifty has broken sharply above the upper end of its sideways range and looks bullish to target further upside from here. Shanghai and Nikkei have to break above 2900 and 38000-38300 decisively to strengthen the bullish case.

Dow (40659.76, +0.24%) has moved up further. We retain our bullish view of seeing 40900-41000 on the upside. A sustained break above 41000 will be bullish to see 42000.

DAX (18322.40, +0.77%) has risen sharply above 18200. Outlook is bullish to see 18500-18700 on the upside now.

Nifty (24541.15, +1.65%) has broken the 24000-24500 range on the upside. While this break sustains, a rise to 24700-25000 is possible. Our bearish view of seeing a fall below 24000 towards 23500 stands negated now.

Nikkei (37,975.00, -0.40%) is unable to gather momentum to rise past 38000. A decisive break above 38000-38300 is needed to open doors towards 40000. Else there could be chances of fall back towards 37000-36500.

Shanghai (2893.82, +0.50%) is attempting to break above the resistance at 2900. A decisive break above 2900, if seen, can target 2950. That will delay the chances of seeing a fall towards 2800.

Crude prices looks bearish for the near term. Gold and Copper has scope to test 2600 and 4.25-4.27 on the upside before a fallback can be seen. Silver can rise towards 29.50-30.00. Natural Gas can fall towards 2.0-1.9.

Brent ($ 79.63) tested a low of $ 78.62 on Friday contrary to our view to see it range bound between $ 79-82.50. It may fall further towards $ 78-76 from here.

WTI ($ 75.50) has declined below $ 76 and may fall further towards $ 74-72.

Gold (2537.20) moved up sharply to test 2550 as expected. A further rise to 2600 looks likely before a fallback might be seen towards 2550-2500.

Silver (28.94) has risen to 29.18 so far in line with expectations. It can continue to rise towards 29.5-30.0 in the near term.

Copper (4.1710) continues to rise and can test 4.25-4.27 on the upside. The 4.25-4.27 is a key resistance which if holds, can lead to a fall back towards 4.1.

Natural Gas (2.1210) fell to a low of 2.0970 so far and may come down further to 2.0-1.9.

No major data release Today.

Data Friday
…………..
9:00 14:30 EU Trade Bal
Expn – …Expected 13.3 …Previous 12.4 … Actual 17.5

12:30 18:00 US Housing Starts
Expn 1325K …Expected 1340K …Previous 1329K …Actual 1238K