The Dollar index gained strength, and Euro came down after the weaker business activity reports in the euro zone economy. The index needs to see a rise past 101 to turn bullish towards 102 in the coming sessions, while Euro can trade within 1.1070-1.12. USDJPY and EURJPY are coming off contrary to our view of seeing a rise towards 145/146 and 162 respectively in the near term. BOJ Governor’s speech today would be important to watch for further directional clarity in both pairs. Aussie needs to see a rise past 0.6850, or else may fall back towards 0.67/66. RBA meeting is scheduled today wherein the Central Bank is likely to keep the interest rates unchanged. The pound could remain ranged between 1.31-1.33/34. USDCNY rose a bit after Governor Pan Gongsheng, at a news conference said the central bank will cut the reserve requirement ratios (RRR) by 50bps. It needs to sustain above the current levels and rise higher to negate a fall to 7.0250 or lower in the coming sessions. EURINR could trade within 94-92 region for a few sessions. USDINR is holding well above the interim support at 83.40 and while it holds, it can bounce back higher towards 83.60/80 in the coming sessions. Watch out for the US Case Schiller and US Consumer Confidence data release scheduled today.

The Dollar Index (100.98) rose sharply to the high of 101.22 after the disappointing business activity reports in the Eurozone economy. Still, a sustained rise past 101.22 will be needed to head towards the upper end of its immediate range of 100.50-102. Only a strong break below 100.5/100 can bring 99.50 into the picture. For now, the 100.50-102 range is likely to remain intact.

EURUSD (1.1103) observed a low of 1.1083 on disappointing pan-Euro PMI releases with the German Manufacturing PMI lower at 40.3 (market expectation was 42.4). Currently, it has recovered slightly from the low and could test 1.1150. A very near-term range of 1.1150-1.1070 can hold for a few sessions. Note that immediate upside scope for a rise to 1.12/1.1250 remains intact for the medium term.

The Dollar-Yen (143.66) and the EURJPY (159.53) are falling contrary to our expectations of seeing a rise to 145-146 and 161.50-162 respectively. BOJ Governor Kazuo Ueda’s speech today would be important to watch to see for clues on the pace and extent of tightening. If the fall continues in both the pairs, a test of 142-140 and 158-157 respectively can be possible in the near term. The upside can be capped at 145-146 and 161.50-162 for now.

USDCNY (7.0575) has risen well from yesterday’s low of 7.0448 and if sustained well above the current levels, can head towards 7.08-7.10 in the near term. We are not ruling out the possibility of a further fall to the support near 7.0250 until a sustained rise above current levels is seen.

Aussie (0.6843) has risen past its resistance near 0.6840. We need to see whether the pair hold above it and rises further or falls back towards 0.67 on the downside. Watch out for the RBA meeting scheduled today wherein the Central Bank is expected to keep the interest rates unchanged. Watch price action near current levels to see whether Aussie turns bullish towards 0.69/70, or declines back towards 0.67/66 in the next 2-3 sessions.

Pound (1.3348) can soon test 1.34 in the coming sessions. Thereafter, whether it tops out or rises further will have to be seen. The bias remains for a fall towards 1.32 in the medium term while below 1.34.

USDINR (83.5575) bounced back higher from the low of 83.4350 yesterday. If the support at 83.40 holds, a rise back towards 83.60/80 could be seen soon. At the same time, any break below 83.40 can lead to an extended fall to 83.35/30 in the near term (less likely).

EURINR (92.7689) is coming off towards the lower end of its range of 94-92 which is likely to persist for a while.

The US Treasury yields have inched up. But resistances ahead can cap the upside and keep the broader downtrend intact. We expect the yields to fall back after testing the resistance. The German yields have come down indicating that the downtrend could have resumed. There is room to fall more from here. Any intermediate rise will be short-lived. The 10Yr GoI is inching up. The yield can consolidate in a narrow range before falling further. The broader trend is down.

The US 10Yr (3.75%) and the 30Yr (4.09%) yields have inched up. But we retain the view of the upside being capped at 3.8% (10Yr) and 4.1% (30Yr). The broader downtrend is intact, and the yields can fall to 3.5% (10Yr) and 3.8% (30Yr) eventually.

The German 10Yr (2.15%) remains stable while the 30Yr (2.48%) yields have reversed lower again. That keeps the bearish view intact for a fall to 2% (10Yr) and 2.2% (30Yr) while below the resistance at 2.3%-2.4% (10Yr) and 2.5%-2.6% (30Yr).

The 10Yr GoI (6.7682%) may consolidate between 6.75% and 6.8% for some time and then resume the fall towards 6.7%. After this fall we can see a bounce back move.

Dow Jones sustains higher and could remain bullish to target further upside while above the support at 41750. DAX has recovered as the support at 18600 seems to be holding well and while above it, we could expect the recovery to extend further. Nifty and Shanghai continues to move up and can target 26000-26200 and 2800 before a corrective fall might be seen from there. Nikkei has broken above its resistance at 38000 and looks like to move up further from here.

Dow (42124.65, +0.15%) sustains higher and is moving up gradually. View remains the same. While above 41750, the bias is bullish to breach 42200 and rise to 42700-42750.

DAX (18846.79, +0.68%) has bounced back from the low 18684. The support at 18600 seems to be holding well. While above 18600, the bullish view of seeing 19600-19700 on the upside will remain alive.

Nifty (25,939.05, +0.57) continues to move up and keeps intact the bullish view of seeing 26000-26200 on the upside. A corrective fall from 26200 to 26000 is a possibility before the upmove resumes.

Nikkei (38,048.50, +0.85%) has broken above the resistance at 38000. While this break sustains a further rise towards 39000-39500 could be seen.

Shanghai (2773.02, +0.87%) has risen to 2781 so far. A further rise towards 2800 looks possible before a corrective fall to 2750 can be seen.

Brent and WTI have fallen back a bit but chances of seeing a rise to their key resistance cannot be ruled out. Gold has scope to rise towards 2670-2700. Silver looks ranged between 30-32. Copper has bounced back well and has potential to rise towards 4.5 or higher. Natural Gas can test 2.9-3.0 before a fall back can be seen from there.

Brent ($ 74.52) has fallen back after testing a high of $ 75.17. Chances of rise towards $ 76-76.50 cannot be ruled out. After that a fall towards $ 73-72 or lower might be seen.

WTI ($ 71.02) has fallen back failing to rise past $ 72. Chances of break above $ 72 and rise towards $ 74 cannot be ruled out if it sustains above the support at $ 69.50. After that a fall could be seen towards $ 71-70

Gold (2652.40) remains stable between 2630-2660 since yesterday. View remains bullish to see rise towards 2670-2700.

Silver (31.17) looks mixed. A broad range of 30-32 might hold for some time. Within this chances of rise towards 32.00 or even higher to 32.50 cannot be ruled out.

Copper (4.3750) has bounced back towards 4.4 from a low of 4.27. View remains the same to see a rise towards 4.5 or higher. Support is at 4.25-4.20.

Natural Gas (2.8660) opened gap up at 2.8620 due to chance of contract. A rise to 2.9-3.0 looks possible before a fall back to 2.8-2.6 can be seen.

4:30 10:00 RBA Meeting
Expn – …Expected 4.35% …Previous 4.35%

8:00 13:30 GER IFO Business Climate
Expn 87.0 …Expected 86.1 …Previous 86.6

8:00 13:30 GER IFO Business Situations
Expn – …Expected 86.0 …Previous 86.5

8:00 13:30 GER IFO Business Expectations
Expn – …Expected 86.3 …Previous 86.8

13:00 18:30 US Case Schiller
Expn – …Expected 5.9% …Previous 6.5%

14:00 19:30 US Cons Conf
Expn 101.1 …Expected 103.5 …Previous 103.3

DATA YESTERDAY:-
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No major data released Yesterday.