Major currencies are trading near their potential reversal levels from where either they can rise back or see a corrective fall in the near term. The Dollar Index has risen well on stronger US ADP Employment. A rise past 102 will be needed to maintain the ongoing trend. The Euro is headed towards support at 1.10. USDJPY and EURJPY have risen well on the news of no further rate hikes for now. If the rise sustains, a test to 150 and 164 can happen soon in the coming sessions. The Aussie failed to rise past 0.6950 and started coming off. Immediate support is seen around 0.6850-0.6830 region. The pound has broken below the mentioned range of 1.3440-1.33 and any break below 1.3250 if seen can make it bearish to 1.31 in the near term. USDCNY is closed today. EURINR is nearing the lower end of the near-term range of 94-92.50/92. USDINR was closed yesterday but can open around 83.80 and head higher towards 83.90-84. On the NDF, it had tested 84.02 yesterday.

Dollar Index (101.749) gained strength yesterday as the ADP employment came out higher than expected at 143K (124k). Going ahead, a decisive break past 102 will be needed to maintain the ongoing rise, or else it is likely to fall back towards 101-100.50 in the coming sessions.

EURUSD (1.1037) has been coming off in line with our bearish view below 1.12. Immediate support can be spotted near 1.10 which can be tested soon in the near term. Thereafter, we need to see whether the support holds and bounces back or the fall extends further.

The newly elected Prime Minister Shigeru Ishiba said that the country was not ready for additional rate hikes, after meeting with the central bank governor Kazuo Ueda. This news led Dollar-Yen (146.75) and the EURJPY (161.98) to rise significantly. Now, if the rise sustains, a test of 150 and 164 looks likely in the near term.

USDCNY (7.0171) is closed till 7th October for China National Day. The currency will resume trade on 8th October.

Aussie (0.6870) failed to see a rise past 0.6950 and started coming off from the high of 0.6942 itself. Currently, it is headed toward the immediate support around the 0.6850-0.6830 region. We need to watch price action around 0.68 to see whether it holds and bounces back or continues to fall further. Only a break below 0.68 if seen, can make the outlook bearish again.

Pound (1.3254) has slipped below our mentioned range of 1.3440-1.33. It has immediate support around the current levels which needs to hold and produce a rise to move up from here. Else, it is likely to extend the fall towards 1.30 in the coming sessions.

USDINR (83.8250) was closed yesterday. On the NDF it tested 84.02 on the upside. In the on-shore markets, the spot closed at 83.8250 on Tuesday and can open around that level today. A higher Dollar can lead to a rise in the USDINR as well towards 83.90-84.00 in the near term.

EURINR (92.6328) is nearing the lower end of its range of 94-92.50/92 region. The preferred view is for the range to hold for some time, but at the same time, we need to be cautious for any break below 92 which can then drag it further to 91.

The US Treasury yields have moved up further. But resistances are there to cap the upside. We can expect the yields to reverse lower and resume the downtrend after some more rise from here. The German yields are coming down in line with our expectation. They can fall more from here and then bounce back again after testing their upcoming supports. The 10Yr GoI is coming down again. It can test its support and then bounce back again.

The US 10Yr (3.79%) and the 30Yr (4.14%) yields have inched further up. The upside can be capped at 3.8%-3.85% (10Yr) and 4.15%-4.2% (30Yr). The yields can reverse lower again and fall to 3.5% (10Yr) and 3.8% (30Yr). The broader downtrend is likely to remain intact.

The German 10Yr (2.09%) and the 30Yr (2.41%) yields are coming down in line with our expectation. The yields can fall to 2% (10Yr) and 2.2% (30Yr). Thereafter a bounce is possible.

The 10Yr GoI (6.7339%) has come down further. 6.7% can be tested again but we expect it to hold and the yield to rise back to 6.76%-6.8%.

Dow Jones has risen and sustained above 42000. While above supports of 41900/41700, there could be scope for a rise towards 42800/43000 soon. Dax could see a correction down to 18900/800. Nifty can test 25600/500 before rising higher towards 26500. Shanghai is closed till 7th October for National Day while Nikkei could rally towards 39000/40000 while above 37500/38000. Thereafter, a dip can be seen from 40000 in the medium term.

Dow (42196.52, +0.094%) sustains above 42000 but is not getting a strong follow-through rise. Supports are at 41900 and 41700 while above which the bias is positive to see a rise to 42800-43000. A break above 42500 can accelerate the rise.

DAX (19164.75, -0.25%) looks vulnerable to see a corrective fall to 18900-18800. Thereafter the uptrend can resume targeting 19800-20000 on the upside.

Nifty (25796.90, -0.05%) can test 25600-25500 and then rise back again towards 26000. While above 25500, Nifty can rise past 26000 again and go up to 26500 and higher.

Nikkei (38591.02, +2.08%) has risen well as expected while support near 37500 holds good. Above 37500-38000, Nikkei could continue to rally towards 39000-40000 in the near term.

Shanghai (3336.50, +8.06%) had closed higher on Monday and would resume trading on 8th October as it is closed till 7th October for China National Day. It will have to be seen if the price manages to hold below the weekly resistance near 3400-3410 in the next week.

Volatility in crude prices flared up on escalation in the Middle East tensions after Israel vowed to retaliate against Iran for its missile attack on Israel on Tuesday that could lead to disruption in crude supplies. The crude prices remain at higher levels despite the US weekly inventory build of 3.9mln barrels for the week ended 27th Sep-24. Brent and WTI could dip while below $ 76 and $ 70. Gold and Silver may trade within 2700-2600 and 32.50-30.50 while Copper could fall towards 4.5 while below 4.8. Natural Gas has tested crucial resistance at 3 below which a dip towards 2.7/2.6 could be likely.

Brent ($ 74.57) and WTI ($ 70.82) rose sharply from weekly lows of $ 69.91 and $ 66.33 to $ 76.14 and $ 71.94 yesterday on heightened tensions in the Middle East. Currently trading below $ 75 and $ 70, we may expect a slow fall to $ 70 (Brent) and $ 66/65 (WTI) in the near term. Thereafter, a broad range of $ 76-70/68 (Brent) and $ 73-65 (WTI) can hold for some time. The upside can get extended towards $ 78/80 (Brent) and $ 73/74 (WTI) in case more uncertainties are seen in the Middle East. Watch price action near current levels for a few sessions.

Gold (2676) trades below 2700. A narrow range of 2640-2700 can hold for the near term before a break above 2700 is seen eventually. The immediate downside may be limited to 2600.

Silver (31.95) rose sharply to test resistance near 32.59 but fell back to close at 31.92 yesterday. The immediate resistance at 32.5 may hold well and take the price down to 31.0-30.50 in the coming sessions.

Copper (4.6430) inched above 4.6 to test 4.80 yesterday, contrary to our expectations of seeing a fall to 4.4-4.2. With immediate support at 4.5, Copper could trade within 4.80-4.50 for a few sessions.

Natural Gas (2.9320) tested a high of 3 yesterday before coming off. The dip came in on the outlook of a higher supply from the US. On the charts, 3.00 is an important weekly trend resistance which if holds can take the prices down towards 2.7-2.6 again in the near term.

0:30 06:00 Australia Trade Balance
Expn – …Expected 5.5 …Previous 6.0

6:30 12:00 CH CPI
Expn 1.7 …Expected -0.1 …Previous 1.0

DATA YESTERDAY:-
————–
22:30 04:00 AU PMI
Expn – …Expected – …Previous -30.8 …Actual -33.6

9:00 14:30 EU Unemp
Expn – …Expected 6.4% …Previous 6.4% …Actual 6.4%

12:15 17:45 US ADP Emp
Expn – …Expected 124.0K …Previous 103K (revised from 99K) …Actual 143K