The Dollar Index tested 100.58 as expected before rising back from there. A break below 100.5 can bring 99.5 into the picture. Euro has risen well but has resistance between 1.1150-1.12 which suggests a limited upside for the pair. USDJPY and EURJPY look bearish towards 139-138.40 and 154-152 respectively. Aussie and Pound may head towards 0.68/6850 and 1.33-1.3350 respectively. USDCNY could extend its fall to 7.05/02 on a break below 7.08, if seen. 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. Important US data releases scheduled today are Retail Sales, Industrial Production and Capacity Utilization. Tomorrow we have the FED policy meeting.

The Dollar Index (100.688) in line with our view, tested 100.58 before slightly bouncing back from there, ahead of the FOMC meeting tomorrow. An immediate range of 100.5-102 may hold for the near term. However, a break below 100.5, if seen this week can extend the downside target towards 99.50. Watch out for US Retail Sales, US Industrial Production and US Capacity Utilization data releases today.

EURUSD (1.1129) extends its rise further as the market speculates a 50 bps rate cut by FED in its 18-Sep-24 meeting. The pair has risen above our mentioned 1.1125 but could have some scope to pause near 1.1150-1.12 region suggesting limited upside in the near term. Either from current levels or upon testing the higher resistance, the pair may fall back towards 1.10 soon.

The Dollar-Yen (140.54) observed a low of 139.58 before slightly recovering from there. We may expect a dip to 139-138.40 before a corrective rise is seen.

EURJPY (156.42) needs to see a rise towards 157-158, else it could test 154 or lower even lower levels of 152-150 before pausing there. Watch price action near 156 to see if it manages to sustain higher or falls lower again.

USDCNY (7.0925) is closed today. While below 7.12, the pair can fall towards lower support near 7.05-7.02 if it manages to break below interim support at 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 (0.6750) and Pound (1.3204) have risen well yesterday. Aussie needs to sustain above current levels to head towards 0.68/0.6850 in the coming sessions while the Pound has risen past 1.32 and if the rise extends, a test to 1.33-1.3350 looks likely to happen soon. Watch price action closely around the current levels for both pairs. Bearishness for the Pound towards 1.30/29 mentioned yesterday is negated while above 1.31/32.

USDINR (83.8925) on the NDF is trading lower, but has immediate support at 83.80 which if held can produce a bounce back to 84-84.10 in the coming days.

EURINR (93.3103) tested 93.4509 before slightly coming down. A sustained rise can take it up to 93.50-94. The immediate downside is likely to be limited to 92.40-92.00. The next 1-2 weeks may trade between the broad range of 92-94.

The US Treasury yields continue to fall as expected. The downtrend is intact, and the yields can fall more. The US Fed meeting outcome tomorrow will be important to watch. A 25-bps rate cut is already factored in the market. The expectations are now increasing to get a 50-bps rate cut tomorrow. We will have to wait and watch. The German yields have turned down again after a short-lived bounce. That keeps intact the broader downtrend. The yields can fall more in the coming days. The 10Yr GoI is coming down towards our expected level. Of 6.75%. A corrective bounce is possible before the fall extends beyond 6.75%.

The US 10Yr (3.63%) and the 30Yr (3.94%) yields continue to come down in line with our expectation. Our bearish view of seeing 3.5% (10Yr) and 3.8% (30Yr) on the downside remains intact. Resistances are at 3.8%-4% (10Yr) and 4.1%-4.3% (30Yr).

The German 10Yr (2.12%) and the 30Yr (2.40%) yields have come down again failing to sustain the bounce seen last week. That keeps intact the downtrend. The yields can fall to 2% (10Yr) and 2.2% (30Yr) while below 2.3%-2.4% (10Yr) and 2.5%-2.6% (30Yr).

The 10Yr GoI (6.7613%) is heading down towards 6.75% in line with our expectation. A corrective bounce from 6.75% to 6.8% is a possibility before the downside extends to 6.7% eventually.

Dow Jones is heading up towards its crucial resistance zone which if holds can lead to fall from there. Key focus is on the FOMC meeting tomorrow where the central bank is expected to deliver a rate cut of 25bps or 50bps. DAX has to breach 18700 to become further bullish or else there could be danger of falling back again to 18400-18300. Nifty remained stable below 25450 but bias is positive to see a break above it and rise to 25700-25800. Nikkei may trade sideways below 37000 for a while.

Dow (41622.08, +0.55%) is moving up as expected towards the 41700-42000 resistance zone. As mentioned yesterday, a decisive break above 42000 will be very bullish to see 42700 and higher levels. We will have to wait and watch.

DAX (18633.11, -0.35%) remains below 18700. It has to breach 18700 to gain momentum and rise to 19000 and higher. Else there is a danger of falling back to 18400-18300 and lower again.

Nifty (25383.75, +0.11%) remained stable below 25450. Bias is positive to break 25450 and rise to 25700-25800. Support is in the 25200-25000 region.

Nikkei (35977.00, -1.65%) has declined further below 36000. It may trade sideways within 37000-35000 for some time.

Shanghai (2704.08) is also closed today. If the support at 2700 holds, a rise towards 2750 could be seen. In case of any break below 2700, if seen, can extend the fall towards 2680-2650.

Brent and WTI have risen back but needs to rise past the resistance at $ 74-75 and $ 71-71.50 respectively to turn further bullish or else they may trade sideways for a while. Gold is hovering below its key resistance. Need to see if it breaks above it or fallback from there. Silver, Copper and Natural Gas have scope to rise towards 32.00-32.50, 4.4-4.5 and 2.4-2.5 respectively.

Brent ($ 73.02) is gradually moving up. A break above $ 74-75 is needed to become bullish towards $ 77. Else it could trade sideways between $ 75-69 for a while.

WTI ($ 70.50) has bounced back and is heading up towards $ 71. Resistance is at $ 71.00-71.50. It has to break above $ 71.50 to move up towards $ 74-75. Else it trade sideways between $ 71.50-65 for a while.

Gold (2609.70) is hovering below the resistance at 2620. A break above it is needed for increased bullishness towards 2650-2700. Else it can fall back towards 2550.

Silver (31.17) saw a high of 31.46 yesterday and has dipped slightly from there. It can rise towards 32.00-32.50 if it stays above 31.00.

Copper (4.2830) rose sharply to 4.32 yesterday as the immediate support at 4.2 held well. A further rise towards 4.4-4.5 looks possible while above 4.2-4.1.

Natural Gas (2.3940) bounced back from a low of 2.2650 and has moved up to 2.40. View remains bullish to see a rise towards 2.5 or higher. Downside might be limited to 2.18-2.12.

6:30 12:00 IN WPI
…kshitij Expn 1.9 % …Expected 1.8% …Previous 2.0 %

12:30 18:00 US Retail Sales (MoM)
Expn 1.2 % …Expected 0.2 % …Previous 1.1 %

12:30 18:00 CA Inflation Y/Y
…Previous 2.5 %

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

13:15 18:45 US Capacity Utilization
Expn 78.0 % …Expected 77.9 % …Previous 77.8 %

DATA YESTERDAY:-
————–

EU Trade Bal
…Expected 14.9 EUR(BLN) …Previous 17.5 EUR(BLN) …Actual 15.5 EUR(BLN)