The Dollar Index slipped after a sharp downward annual revision was seen in the NFP data by 818k and on the release of the FOMC July meeting minutes yesterday that indicated that the FED officials are inclined towards a rate cut in Sep. Traders now price in a 38% probability of a 50bps cut, up from 33% a day earlier and a 62% chance of a 25bps reduction, according to the CME Group’s FedWatch Tool. Market await US weekly jobless claims data later during the day and Powell’s Jackson Hole speech tomorrow for further confirmation on a rate cut. Dollar Index may remain weak while Euro can head towards 1.12/1.13, if it sustains above 1.11. USDJPY and EURJPY need to hold above 145 and 160 to continue corrective upmove. Pound and Aussie could face near-term resistances while USDCNY may trade above 7.12 for now. EURINR can dip from 94 while USDINR may continue to trade within 83.85/90-83.40 for the near term.

The Bureau of Labour Statistics reported that the actual job growth from April 2023 to March of this year was nearly 30% less (by 818k) than the initially reported 2.9 million. This led the Dollar Index (101.236) to fall sharply to a low of 100.92. Currently, it has recovered from the low but still needs to rise past 102-102.50 to negate a further fall towards 100.50-99.50 in the near term. Watch out for US Existing Home sales data release today and Powell’s speech at the Jackson Hole tomorrow.

EURUSD (1.1142) rose to the level of 1.1173 on continued weakness in the Dollar. Further, if the rise continues, a test to 1.12/1.13 could be seen before a dip can be expected.

Dollar-Yen (145.41) had dipped slightly to the level of 144.45 but has currently recovered from there and EURJPY (162.01) seems to be holding above 160. If they can manage a bounce from here, a test of 150/152 and 164/165 in the medium term can be possible. Else, a break below 145 and 160 if seen can be bearish in the medium term. Overall long-term view remains bearish.

The USDCNY (7.1330) continues to trade lower near the lower end of the 7.18-7.12 range we have been looking at over the last few sessions. A bounce from 7.12/13 is needed for the pair to rise. A break below 7.12 could make it vulnerable to test 7.10/08 but that looks less likely for now. Watch possible bounce from 7.12 in the near term.

Aussie (0.6729) seems to be holding well below our mentioned interim resistance near 0.6775. While it holds, a decline looks possible back to 0.67 or lower in the coming sessions. Note 0.6775 and 0.6850 are crucial resistances above current levels.

Pound (1.3085) tested 1.3119 on the upside but could not sustain and started coming down. Only a strong break past 1.31 if seen and sustained, can take it higher towards 1.32. Else, a decline can be possible towards 1.29/28 in the medium term.

USDINR (83.9275) observed a low of 83.80 yesterday before closing higher at 83.9275. Overall, a broad range of 83.75-84.00 and an immediate range of 83.85/90-84.00 can hold for now.

EURINR (93.5051) indeed rose past 93.50, tested the high of 93.7164 before coming down. The pair needs to sustain above current levels to head towards 94 or higher in the near term. Any break below 93 if seen, can make this a false break and if so, then our view of seeing a dip can be possible towards 92/91.

The US Treasury yields, German yields, and Indian yields look bearish for the near term. The downside view holds intact, especially after the strong downward revision of the US NFP data yesterday which has signaled the rising prospect of a deeper rate cut by the FED in its Sep-24 meeting.

The US 10Yr (3.807%) and the 30Yr (4.083%) yields have dipped slightly ahead of the US jobless claims data later today and continue to look bearish for the near term. The sharp downward revision on the US NFP and the FOMC meeting minutes released yesterday hints at an upcoming rate cut by the FED in September but the markets experts still have divided opinion on either a 25 or a 50bps cut. The US 10yr and 30yr yields could fall further towards 3.5% and 4-3.8% respectively in the near term. Our view remains bearish for the near term.

The German 10Yr (2.199%) and the 30Yr (2.436%) yields have also dipped. Overall a near-term downtrend is intact, and the yields can fall to 2% (10Yr) and 2.2% (30Yr) while below 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.8578%) fell sharply yesterday but found some support near 6.8457%. But our view remains bearish in the near term with a possible fall towards 6.8-6.75% soon. For the next 2-3 sessions 6.84/83% could hold as interim support.

Dow Jones hovers below its immediate resistance. Need to see if it breaks higher or falls back from here. DAX and Nifty remain bullish for the near term. Nikkei is attempting to break above its resistance and looks bullish to target 39000-40000 in the near term. Shanghai remains vulnerable for a fall towards 2800.

Dow (40890.50, +0.14%) is hovering below the resistance of 41000. If a rise past the resistance is seen, then a further rise to 41800-42000 can be expected. Else, it can come down to the support of 40500. Thereafter, price action would be important to look for further directional clarity.

DAX (18448.95, +0.50%) has recovered well. It remains positive and looks bullish to see a rise towards 18600-18700. Thereafter we have to see if it extends the rise towards 19000 or turns lower towards 18300.

Nifty (24,770.20, +0.29%) has sustained above 24500 and can target 25000 over the next few sessions. Supports are at 24500 and 24400.

Nikkei (38,197.50, +0.65%) has bounced back and is attempting to break above 38000-38300. It looks likely to rise towards 39000-40000. The possible fall to 37000-36500 that we had mentioned yesterday may not happen.

Shanghai (2853.15, -0.12%) remains weak. It has interim support at 2850-2840. However, the bias is negative to see a break below the support of 2840 and fall towards 2800.

Crude prices continue to dip but have crucial support coming up, which if holds, can produce a bounce back in the medium term. Gold, Silver and Copper can fallback while they remain below 2600, 30.00 and 4.20-4.25. Natural gas to remain range bound for a while.

Brent ($ 75.86) has declined further below $ 76. Crucial, long-term Support at $ 75. While $ 75 holds as Support, a bounce back up towards $ 80-85 can be seen.

WTI ($ 71.66) is coming down towards $ 71. The level of $ 71-70 is a crucial support zone which may hold and produce a bounce back towards $ 78-80.

Gold (2543.40) lacks strength to rise past 2550. Key resistance is at 2600. While that holds, a fallback towards 2500 might be seen.

Silver (29.50) is hovering below 30. It may fall towards 28.50-28.00 while it stays below 30.

Copper (4.1865) is trading near the crucial resistance zone of 4.20-4.25. While that holds, a fall towards 4.1-4.0 might be seen.

Natural Gas (2.1920) may remain range bound between 2.1-2.3 for a while. It has potential to break on the upside and rise towards 2.4-2.5 eventually while it sustains above 2.10.

14:00 19:30 US Existing Home Sales
Expn 3913K … Expected 3920K … Previous 3890K

Data Yesterday
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No major data released yesterday.