The Dollar Index saw some relief yesterday as the US New Home Sales data came out stronger at 716K than expected at 693K. Still, a strong break past 102 will be needed to make the outlook bullish. Else the current rise could be short-lived to 101.50-102. Euro is holding well below 1.12 for now and can extend the fall towards 1.1050-1.10 in the coming sessions within very near term range likely to hold between 1.12 and 1.11. USDJPY and EURJPY have upside limited to 144-145 and 162 respectively from where they are likely to fall back towards 142-140 and 158-157 in the medium term. Aussie tested 0.69 but could not sustain. If the fall continues, it can be vulnerable to test 0.68.67 on the downside. The Pound slipped below 1.34 and now looks further bearish to 1.32 in the near term. USDCNY could remain bearish while below 7.03. EURINR could trade within 92-94 region for a few sessions. USDINR can trade within 83.40/50-83.70 region for a while. US GDP and the US Durable goods are the important data release scheduled today.

The US New Home Sales data came out higher than expected at 716K (693K). This led Dollar Index (100.934) to halt the fall at 100.22 for now. Currently, the pair has risen well from the low of 100.22 but the upside could be limited to 101.50-102. A strong break past 102 will be needed to make the outlook further bullish in the medium term, else it is likely to fall back towards 100 or even lower. Watch US GDP and Durable Goods scheduled today.

EURUSD (1.1140) moved slightly above the resistance of 1.12 to the high of 1.1213 but Dollar strengthened after the stronger New Home Sales data led Euro to fall again. While below 1.12, immediate range of 1.12-1.11 can hold for the next 1-2 sessions. But there is also some scope for a fall towards 1.1050-1.10 in the medium term. Alternatively, a decisive break past 1.12 will be needed to test 1.1250 or higher (less likely for this week).

The Dollar-Yen (144.82) and the EURJPY (161.34) are nearing our mentioned targets of 145 and 162 respectively which can be tested soon in the near term. Thereafter, we will need to see whether the prices fall back to 142-140 and 158-157 respectively in the medium term or extend the rise further. The bias remains bearish below the respective levels of 145 and 162.

Although USDCNY (7.0207) managed to rise past 7.0250 yesterday but still looks intrinsically weak for a decline towards 7.00 or lower in the near term. Watch price action near current levels for some more sessions to get more clarity.

Aussie (0.6845) has been coming from the level of 0.6908, breaking below our expected support near 0.6850. The pair, if slips below 0.68, can be vulnerable to test 0.67 before attempting to rise again.

Pound (1.3333) could not sustain trade above 1.34 and fell lower yesterday negating our bullish view towards 1.36-1.3650. Now while below 1.34, the price may head towards the lower end of the 1.34-1.32 range with 1.32 being an important support level.

USDINR (83.5975) indeed saw a pullback to 83.50 as expected and bounced to test 83.6425, trading within our expected range of 83.70-83.50 mentioned yesterday. We may expect this range to hold for a couple of sessions with a maximum extension to support of 83.40 on the downside. A break above 83.70, in the medium term will pave the way for a further rise towards 83.80/85.

EURINR (93.1338) is likely to remain below immediate resistance near 94 with immediate support at 93 and lower near 92. Overall the 94-92 range may hold for some more time in the near term.

The US Treasury yields have moved up. But resistances are there to cap the upside. The broader downtrend is intact, and the yields are likely to fall back again. The US PCE (2.5% YoY in August) data release tomorrow will be important to watch. A fall in PCE from here can be negative for the yields. The German yields are coming closer to their resistance zone which we expect to hold and keep the downtrend intact. We can expect the yields to fall again in the coming days. The 10Yr GoI has resumed its downtrend. It can fall more from here and then possibly reverse higher after testing the upcoming support.

The US 10Yr (3.78%) and the 30Yr (4.14%) yields have moved up. The 10Yr has resistance at 3.8% from where we can expect it to reverse lower targeting 3.5% on the downside. The 30Yr on the other hand can see an extended rise to 4.2%-4.25% and then reverse lower contrary to our expectation to turn down from 3.1%.

The German 10Yr (2.17%) and the 30Yr (2.49%) yields have inched up. Resistance at 2.2%-2.3% (10Yr) and 2.5%-2.6% (30Yr) can cap the upside and keep the downtrend intact. View remains bearish to see a fall to 2% (10Yr) and 2.2% (30Yr) eventually.

The 10Yr GoI (6.7430%) has resumed its fall. It can test 6.7% and then possibly bounce back towards 6.75%-6.8%.

Dow Jones has fallen back sharply but has got support at 41750-41700 region. While that holds, view is positive to see a break above 42250 and target further upside. A break below 41700, if seen, could trigger a corrective fall. DAX has come down and looks likely to consolidate between 18600-19100 for a while before a break above the upper end of the range is seen. Nifty remains higher and might test 26200 on the upside before a corrective dip might be seen from there. Nikkei and Shanghai have scope to rise towards 39000-39500 and 3000-3100.

Dow (41914.75, -0.70%) has come down. While above 41750-41700, the bias is positive to breach 42250 and rise to 42700-42750. A break below 41700 can trigger a corrective fall to 41350-41000.

DAX (18918.50, -0.41%) has come down again. A sideways consolidation between 18600 and 19100 looks like a possibility for some before a rise to 19700-19800 happens.

Nifty (26,004.15, +0.25%) is getting bought in the 25900-25850 region over the last few days. That leaves the near-term bias positive for a rise to 26200. Thereafter a corrective fall to 26000-25800 is a possibility.

Nikkei (38,822.00, +2.40%) has bounced back as the support at 37800 held well. A rise towards 39000-39500 looks possible.

Shanghai (2919.47, +0.8%) fell back sharply to 2896 yesterday but has recovered well from there today. It may rise towards 3000 or even higher to 3100 in the near term.

Brent and WTI have fallen back and might fall further while they stay below $ 75-76 and $ 72 respectively. Gold, Silver and Copper have key resistances overhead which have to be broken for increased bullishness or else they could fall in the near term. Natural Gas is stuck in a narrow range but outlook seems bearish while below the resistance at 2.9-3.0.

Brent ($ 73.11) has fallen back to 73 levels contrary to our view to see a test of $ 76. If it sustains below $ 75-76, a dip towards $ 70 could be seen.

WTI ($ 69.83) has fallen sharply towards $ 69 contrary to our view to see a rise towards $ 74. The level of $ 72 seems to be acting as a decent resistance. While below $ 72, a further fall towards $ 68-67 looks possible.

Gold (2683) tested a high of 2695 so far. It has to rise past 2700 for increased bullishness towards 2800. Else there could be chances of seeing a fall towards 2650-2600.

Silver (32.15) has declined towards 32. A decisive break above 33 is needed to become further bullish towards 34. Else there could be chances of seeing a further fall to 31.50-31.00.

Copper (4.4950) has come down a bit. A break above its resistance of 4.56-4.60 is needed to become further bullish towards 4.7-4.8. Else it can fall towards 4.4.

Natural Gas (2.8510) is stuck in a very narrow range of 2.90-2.77. Resistance is at round 2.9-3.0, while below which, a fall towards 2.6 could be seen.

8:30 14:00 SNB Mtg
Expn – …Expected 1.00% …Previous 1.25%

12:30 18:00 US Durable Goods Orders
Expn – …Expected -2.7% …Previous 9.9%

12:30 18:00 US GDP
Expn – …Expected 2.9% …Previous 2.9%

DATA YESTERDAY:-
————–
14:00 19:30 US New Home Sales
Expn 703K …Expected 693K …Previous 751K …Actual 716K