Most currencies have moved in line with our expectations. The Dollar Index is headed towards 102, the Euro has scope to fall towards 1.10 while below 1.11, USDJPY can test 145 but EURJPY will need a break past 159 to rise towards 160. Aussie looks bearish towards 0.66, while Pound, if remains below 1.3085, can extend its fall towards 1.30-1.2950. USDCNY has risen but needs to break above 7.14 to turn bullish for the medium term. EURINR has slipped below 93 and can now extend its fall towards 92.50-92 in the near term. USDINR can continue to trade between 83.80/85 and 84.00.

Dollar Index (101.667) has moved in line with our bullish view ahead of the US CPI data to be released tomorrow and if the rise sustains, it can test 102 before declining back towards 101-100.50 again. Overall, 102-100.50 is likely to hold for the near term. Only a decisive break past 102 can take it higher to 102.50+.

EURUSD (1.1033) is coming off as expected and can soon test 1.10 in the coming sessions. Thereafter, price action around 1.10 would be important to see as to whether the pair rises back or declines further to 1.0950-1.09.

While Dollar-Yen (143.33) can soon test 144 on the upside, EURJPY (158.15) needs a strong break past 159 to head towards 160-161 in the coming sessions. Only a break below 142 and 158 if seen, can bring in lower targets of 140 and 156 into the picture. Till then the corrective rise in both pairs can continue for a few sessions.

USDCNY (7.1221) has risen past our initial target of 7.12, but now it needs to sustain above current levels and break above 7.14 to turn bullish for the medium term. We expect the downside to be limited to support at 7.08 for now.

Aussie (0.6653) is nearing our mentioned target at 0.6650 and is likely to extend its fall towards 0.66 in the near term while Pound (1.3065) fell sharply on Dollar strength, breaking below our mentioned 1.3085. If an immediate bounce back is not seen, it can extend its fall towards 1.30-1.2950 soon.

USDINR (83.9538) may continue trade within 84.00-83.85/80 region for the near term.

EURINR (92.6542) tested 93.1485 yesterday but managed to fall below 93. It can now extend the fall towards 92.50-92 in the near term if the fall sustains.

The US Treasury yields continue to come down in line with our expectation. View is bearish and the yields can fall more from here. The US CPI data release tomorrow will be an important data to watch. The German yields remain lower. The trend is down, and the yields can fall further. The 10Yr GoI remains stable. It can be in a narrow range for some time before resuming its downtrend.

The US 10Yr (3.71%) and the 30Yr (4.01%) yields have come down further. Bearish view is intact for a fall to 3.5% (10Yr) and 3.8% (30Yr). Resistances are at 3.8% and 4% (10Yr) and 4.1% and 4.3% (30Yr).

The German 10Yr (2.17%) and the 30Yr (2.43%) yields remain lower. View is bearish. The yields can fall to 2% (10Yr) and 2.2% (30Yr) while below 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.8546%) continues to be stable. View remains bearish while below 6.86% to break 6.84% and fall to 6.8%-6.75%.

Decent bounce/recovery is seen in most of the equities expect for Shanghai. However the indices have resistance overhead which they need to surpass to turn the sentiment bullish. Else could be vulnerable to further fall. Shanghai is expected to fall to 2700.

Dow (40829.59, +1.2%) has risen back well. But a strong rise above 41000 is needed to turn the sentiment positive again. While below 41000, the danger of the fall to 40000-39500 is still there.

DAX (18443.56, +0.77%) has bounced slightly. 18650 can be a good resistance while below which the bias is negative to see 18000 and even 17500 on the downside. The price action in the next few days will be important.

Nifty (24,936.40, +0.34%) has risen back above 24900. A strong follow-through rise from here breaking above 25100 will be needed to clear the way for 25500. Else the danger of the fall to 24500 cannot be ruled out.

Nikkei (36232.00, +0.20%) has bounced back slightly. It has to rise past the resistance at 37000 to become bullish towards 37500-38500. Else a fall towards 35000-34000 cannot be ruled out.

Shanghai (2731.86, -0.17%) trades lower below 2750 and has declined towards 2725. A test of key support at 2700 looks likely. After that we need to see if it bounces back from 2700 or extends the fall towards 2680-2650.

Crude prices are holding well above their immediate support and might trade sideways for a while. Gold, Silver and Copper have recovered slightly but appears range bound. Natural Gas has declined further below 2.15 but downside seems limited to 2.10.

Brent ($ 71.85) is holding well above $ 70. While above $ 70, a range of $ 70-74/75 might be the trading range for some time.

WTI ($ 68.65) has moved up towards $ 69. As long as the support at $ 66-65 holds, a range of $ 65-71 might be the trading range for some time.

Gold (2532.30) appears ranged between 2500-2550. Support is at 2500 and then at 2450. While above these, there could be chances of break above 2550 and rise towards 2600-2610 in the near term.

Silver (28.65) has managed to hold above 28 and looks ranged between 28-29.50. Any break below 28, if seen would be limited to 27.50/40.

Copper (4.1320) looks range bound between 4.00-4.20. Support is at 4.00 and then at 3.90. While above these, there could be chances of seeing a break above the upper end of the range and rise towards 4.4 in the coming days.

Natural Gas (2.1380) has declined further below 2.15. The 2.3-2.0 range remains intact. Within this, immediate support is seen at 2.10. While that holds, view remains bullish to see a break above 2.3 and rise towards 2.4-2.5 in the coming sessions.

6:00 11:30 UK Unemp
.. Expectations 4.1 …Expected 4.1 …Previous 4.2

DATA YESTERDAY:-
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JP GDP
…Expected 0.8% …Previous 0.8% …Actual 0.7%