The lower US PCE and Personal income took the Dollar Index to the low of 100.15 before recovering a bit from there. An immediate range of 101.50-100.20 can hold for some time. The Euro, while below 1.12 can fall towards 1.1050-1.10 in the medium term. USDJPY and EURJPY remained volatile due to the Presidential victory of Former Defense Minister Shigeru Ishiba which created uncertainty in the future policy decisions. The ongoing fall, if continues, can get extended to 140 (USDJPY) and 157-156 (EURJPY) in the near term. while the Aussie needs to rise past 0.6950 to become further bullish, Pound may trade within 1.3440-1.33. USDCNY is trading near the crucial support at 7. Need to see whether it holds or not. EURINR could trade within 92-94 region for a few sessions. USDINR is likely to hold the range of 83.40/50-83.70/80.

Dollar Index (100.463) fell sharply to the low of 100.157 on Friday after the US PCE and Personal income came lower than expected at 0.10% (0.20%) and 0.20% (0.30%) respectively. It has recovered well from the low now and while it sustains, an immediate range of 100.20-101.50 can hold for some time.

EURUSD (1.1158) tested 1.12 on Friday on Dollar weakness but could not sustain it and started coming down. While the immediate resistance at 1.12 holds, the pair is likely to hold the range of 1.11-1.12. There could be some scope to test 1.1050-1.10 but that would come only on a confirmed break below 1.11.

The former defense minister Shigeru Ishiba is set to become prime minister on Tuesday after winning the presidency of the ruling Liberal Democratic Party on Friday. The Yen reacted to this as the victory came along with future uncertainties about policy directions and rate cuts. Dollar-Yen (142.34) and the EURJPY (158.82) failed to sustain a rise past 146 and 164 respectively and started coming off. If continued, the ongoing fall from 146.47 and 163.49 can get extended to 140 and 157-156 respectively in the near term.

USDCNY (7.0141) is hovering around 7. Now we need to see whether the pair bounces back higher from here or falls below 7 towards 6.97/6.94. Watch price action closely around 7.

Aussie (0.6913) exceeded our expected resistance near 0.6915 to test 0.6937 before coming down while Pound (1.3374)is trading within the range of 1.3440-1.33 and could sustain within the range for some more time. Aussie needs to necessarily rise past 0.6950 to head towards 0.70 or higher in the near term. Else, it is likely to fall back towards 0.68. or lower.

USDINR (83.7050) is expected to hold the range of 83.80/70-83.40 for the coming weeks. At the same time, we need to be cautious for any immediate rise to 84 which would be triggered on a break past 83.80. For now, our preferred view is for the mentioned range to hold.

EURINR (93.4168) continues to remain volatile within its immediate range of 92-94 which may persist for some more time in the near term.

The US Treasury and the German yields have reversed lower again as expected. The resistances are holding well and are keeping intact the broader downtrend. Both the US Treasury and the German yields have room to fall more from here. The US PCE data released on Friday can keep the Treasury yields under pressure. The PCE for September came in lower at 2.37% (YoY), down from 2.65% in August. This keeps the prospects high for more rate cuts going forward. The US ISM PMI data release tomorrow will need a close watch. A weak PMI number can drag the yield further lower. The Indian 10Yr GoI has bounced back sharply. The support is holding well, and the yield can rise more from here.

The US 10Yr (3.75%) and the 30Yr (4.10%) yields have reversed lower again as expected. While below the resistance at 3.8%-3.85% (10Yr) and 4.15%-4.2% (30Yr) the bearish view is intact to see a fall to 3.5% (10Yr) and 3.8% (30Yr).

The German 10Yr (2.13%) and the 30Yr (2.46%) yields have come down. The resistance at 2.2%-2.3% (10Yr) and 2.5%-2.6% (30Yr) are holding well as expected. Our view of seeing a fall to 2% (10Yr) and 2.2% (30Yr) remains intact.

The 10Yr GoI (6.7609%) has risen back sharply. The support at 6.7% is holding well as expected. The yield can now rise to 6.8% and higher.

Dow Jones and Nifty have come off a bit but have near term supports, while above which the outlook remains bullish for the near term. DAX continues to rise and have room to move up further from here. Nikkei has fallen back sharply from levels below 40000 but downside might be limited to 37500-37200. Shanghai has broken sharply above its crucial resistance. Now, if the break sustains, a further rise could be seen in the coming sessions.

Dow (42313, +0.33%) has come-off after surging to a high of 42628 on Friday. With support around 41800, the outlook remains bullish to see 42800-43000 on the upside.

DAX (19473.63, +1.22%) continues to move up. The rise to 19700-19800 is happening in line with our expectation. The upside can extend even up to 20000.

Nifty (26,178.95, -0.14%%) has come-off from the high of 26277. While above 26000, the outlook is bullish to see 26700-26800 on the upside.

Nikkei (38121.79, -4.29%) indeed rose to 39830 last Friday in line with expectations for a rise towards 39500-40000 and has fallen back from there. Support is seen at 37500-37200. While the support holds, a broad range of 37200-40000 can persist for some time.

Shanghai (3191.50, +3.37%) opened gap up at 3194.72, breaking above the crucial long term resistance at 3100 and has tested a high of 3272.08 so far. This is contrary to our expectation that the resistance at 3100 will hold and lead to a fall towards 3000. Now, if the break sustains above 3100, it may rise further towards 3300-3400-3410.

Crude prices have recovered a bit but have key resistance ahead, while below which the broader picture may remain bearish for the near term. Gold, Silver and Copper looks bearish for the near term while below the resistance at 2700, 33.00 and 4.80 respectively. Natural Gas has recovered well and might test 2.9-3.0 on the upside.

Brent ($ 71.63) has bounced back from $ 70 to $ 72.36. Resistance is at $ 74-75. As long as that holds, a fall towards $ 68-67 cannot be ruled out.

WTI ($ 68.22) has bounced back towards $ 69 as it is getting some support at $ 67. Resistance is at $ 71 and then at $ 72-73. While it sustains below $ 73, a fall to $ 65-64 looks possible in the coming days.

Gold (2681.50) is holding well below 2700 and has seen a low of 2665 so far. While below 2700, a further dip towards 2650-2630 might be seen. Thereafter it may continue the uptrend towards 2800.

Silver (31.89) is holding well below the resistance at 33 and has seen a low of 31.64 for. A further dip to 31.50-31.00 is possible while it stays below 33.

Copper (4.6570) rose sharply to 4.79 today in line with our expectations to see a rise to 4.80 and has come down from there. The level of 4.80 is a key resistance. While that holds, a fall towards 4.6-4.5 or even 4.4 could be seen.

Natural Gas (2.8750) bounced back sharply above 2.85 from a low of 2.72 contrary to our view to see a further fall to 2.6. It may test 2.9-3.0. After that, a break above 3.0, if seen, can open doors towards 3.20.

1:45 07:15 CN PMI
Expn 50.7 …Expected 50.5 …Previous 50.4

6:00 11:30 UK GDP
Expn – …Expected 0.6% …Previous 0.6%

DATA YESTERDAY:-
————–
9:00 14:30 EU Biz Climate
Expn 94.9 …Expected 96.5 …Previous 96.5 …Actual 96.2

12:30 18:00 US Personal Income
Expn 0.5 …Expected 0.4 …Previous 0.3 …Actual 0.2

12:30 18:00 US Core PCE Price Index
Expn 0.1 …Expected 0.2 …Previous 0.2 …Actual 0.1

12:30 18:00 US PCE
Expn 0.2 …Expected 0.2 …Previous 0.2 …Actual 0.1

12:30 18:00 CA GDP
Expn – …Expected 0.1 …Previous 0.0 …Actual 0.2