Many important data releases are due this week that could keep the currencies volatile; the most important being the central bank policy meetings from the FED, BOE and BoJ on 18th, 19th, and 20th of September respectively. Among the other data releases, we have the US IIP, EU CPI, and Japan CPI that would be important to watch. The Dollar Index could test 100.5 before rising to 102 later. Only a break below 100.5 will bring in 99.5 into the picture. Euro can trade within 1.1125-1.10/1.0950 region for now. USDJPY and EURJPY continue to fall and could test 139-138.40 and 154 respectively before a possible halt. Aussie and Pound are in a short corrective rise but could be bearish while below 0.68/6850 and 1.32. In the medium term, a fall to 0.65/64 (Aussie) and 1.30/29 (Pound) looks likely. USDCNY could extend its fall to 7.05/02 on a break below 7.08, if seen. Resistance at 7.12 seems to be holding well for now. EURINR has risen past 93 but needs to sustain to rise towards 93.50/94 else can fall back towards 92.40-92.00. USDINR can continue to trade between 83.80 and 84.00, both being immediate support and resistance levels.

The Dollar Index (100.98) trades lower today and is expected to test 100.5 before bouncing back from there. An immediate range of 100.5-102 may hold for the near term. Only a break below 100.5, if seen this week can extend the downside target towards 99.50.

EURUSD (1.1087) has scope to test immediate resistance near 1.1125 before falling back towards 1.10 later during the week. A near-term range of 1.1125-1.10/1.0950 can hold for now.

The Yen continues to strengthen further. We may expect a dip in the Dollar-Yen (140.53) to 139-138.40 before a corrective rise is seen.

EURJPY (155.79) has broken below 156 and could test 154 before pausing there. If the pair fails to hold above 154, it could be vulnerable to a strong bearish move towards 150. Watch price action near 154 this week.

USDCNY (7.0925) fell sharply on Friday, holding well below 7.12, which is now a crucial near-term resistance. While below 7.12, the pair can fall towards support near 7.05-7.02 if it manages to break below 7.08. A narrow range of 7.12-7.08 is possible just now but it could extend down to 7.05/02 on a confirmed break below 7.08.

Aussie (0.6709) and Pound (1.3142) have risen slightly but while below 0.68/6850 and 1.32, view is likely to be bearish in the near to medium term towards 0.65/64 and 1.30/29 respectively. The current rise could be short lived for the next couple of sessions.

USDINR (83.8925) has immediate support at 83.80 which if held can produce a bounce back to 84-84.10 in the coming days.

EURINR (93.0322) trades just above 93 now and needs to sustain the rise to move up towards 93.50-94. The immediate downside is likely to be limited to 92.40-92.00. The next couple of weeks may trade between the broad range of 94-92.

The US Treasury yields remain lower. The view remains bearish and there is room for the yields to fall more from here. The German yields remain stable after the bounce on Thursday. Resistances ahead can cap the upside and keep the broader downtrend intact. The Indian 10Yr GoI continues to fall in line with our expectation. The downtrend is intact. and the yield can fall more.

The US 10Yr (3.65%) and the 30Yr (3.98%) yields remain lower. While below 3.8%-4% (10Yr) and 4.1%-4.3% (30Yr) bias is bearish to see a fall to 3.5% (10Yr) and 3.8% (30Yr).

The German 10Yr (2.15%) and the 30Yr (2.43%) yields remain stable. View remains bearish for a fall to 2% (10Yr) and 2.2% (30Yr) while below 2.3%-2.4% (10Yr) and 2.5%-2.6% (30Yr).

The 10Yr GoI (6.7904%) continues to fall. The bearish view is intact to see 6.75%-6.7% on the downside.

Dow Jones and DAX continues to rise and can extend the rise to 41700-42000 and 19000. Nifty has dipped slightly but chances of seeing a rise to 25700-25800 will remain intact while above 25000. Nikkei and Shanghai are closed today.

Dow (41393.78, +0.72%) has moved up further and looks strong. A test of 41700-42000 looks likely this week. A decisive break above 42000 will be very bullish as it will confirm an inverted head and shoulder pattern on the chart.

DAX (18699.40, +0.98%) continues to move up. If the momentum sustains, it can breach 18700 and extend the rise to 19000 and higher going forward. The price action in the next few days will need a watch.

Nifty (25,356.50, -0.13%) has come down slightly. Bias is positive to breach 25450 and rise to 25700-25800 while above 25150-25000.

Nikkei (36581.76, -0.68%) closed lower on Last Friday. A decisive break above 37000 is needed to move up towards 38000-38500. Else it may trade sideways between 37000-35000 for some time. Note: Nikkei is closed today.

Shanghai (2704.08, -0.48%) has declined towards the support at 2700. While that holds, a rise towards 2750 could be seen. In case of any break below 2700, if seen, can extend the fall towards 2680-2650. Note: Shanghai is closed today.

Brent and WTI have declined and might trade sideways for a while if they fails to break above the resistance $ 74-75 and $ 70-71 respectively. Gold has key resistance overhead which can halt the current rally and lead to a fallback from there. Silver has broken above its resistance of 31 and if the break sustains, a further rise could be seen in the near term. Copper and Natural Gas have dipped but downside might be limited to 4.2-4.1 and 2.18-2.12 respectively.

Brent ($ 71.78) has come down after testing a high of $ 73.24. A break above $ 74-75 is needed to become bullish towards $ 77. Else it could trade sideways between $ 75-69 for a while.

WTI ($ 68.96) has declined after facing rejections near $ 70-71. Failure to rise past $ 71 can lead to a sideways trade between $ 71-65 for a while.

Gold (2612.70) has entered into the key resistance zone of 2620. If 2620 holds, a fall towards 2550 can be seen. Only a strong break above 2620 can lead to a rise towards 2650-2700.

Silver (31.24) has broken above the resistance at 31. If the break sustains, a rise towards 32.00-32.50 is possible before a pause can be seen.

Copper (4.2105) lacks a follow through rise. Immediate support is seen at 4.2 and then at 4.1. While above these, chances of rise towards 4.3-4.4 cannot be ruled out.

Natural Gas (2.2750) has fallen back after failing to rise past 2.40. Immediate support is at 2.18-2.12. While above these, chances of rise towards 2.5 is still possible.

6:30 12:00 IN WPI
Expn 1.95 % …Expected 1.80 % …Previous 2.04%

9:00 14:30 EU Trade Bal
…Expected 14.9 EUR (BLN) …Previous 17.5 EUR(Bln)

DATA On FRIDAY:-
—————
EU Ind Prodn (MoM)
Expn -0.5 % …Expected -0.3 % …Previous 0.0 % …Actual-0.3 %