The Dollar Index surged yesterday to 102.09 possibly as safe haven amidst the escalating tensions in the Middle East. The index needs to sustain above 102 to continue moving up, else can fall back towards 101-100.50 again. Euro is headed towards 1.10 which needs to sustain to prevent a further dip to 1.0950/1.09. USDJPY and EURJPY could remain below 150 and 164 respectively. Aussie can be ranged from 0.6850-0.68. Watch price action at 0.68 for a bounce or break below from there. The pound saw a significant fall yesterday led by the dovish comments from the BoE Governor. EURINR may trade within 94-92.50/92. USDINR can test 84-84.10 in the near term before facing rejection. Watch US NFP and Unemployment data to be released today.

Dollar Index (101.884) tested 102.099 on the upside before coming down. The Dollar could be rising on safe haven amidst the ongoing tensions in the Middle East. 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. Watch out for US NFP and Unemployment data release scheduled today.

EURUSD (1.1033) tested our mentioned target of 1.10 before recovering a bit from there. Now, we need to see whether the 1.10 holds and the pair bounces higher or extends to fall to 1.0950/09 in the near term.

Dollar-Yen (146.49) and the EURJPY (161.61) has declined a bit. A break below 146 and 161 will be needed to negate the rise to 150 and 164 in the near term. Until then, the preferred view is bullish.

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

Aussie (0.684) is trading near the immediate support around the 0.6850-0.6800 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 (1.3129) saw a significant fall yesterday which was led by the dovish comments of BoE Governor Andrew Bailey which suggested the central bank could become “a bit more aggressive” in cutting interest rates. If the pair sustains above current levels, it can attempt to rise back towards 1.3250, else any break below 1.31 can drag it further to 1.30 soon.

USDINR (83.9725) tested a high of 83.9775 yesterday as expected. Immediate resistances are seen at 84 and 84.10 respectively which if held can bring back the pair down to 83.90/80 in the near term.

EURINR (92.6209) needs to sustain above 92.50 and rise past 93, else any break below 92 if seen can drag it lower to 91 in the coming sessions. The preferred view is for the range of 94-92.50/92 to hold for some time.

The US Treasury yields have and come close to their resistances. While the broader trend is down, a break above the immediate resistances can trigger an extended rise before the downtrend resumes. The US Unemployment data release today will be important to watch. If the Unemployment rate (4.2%) goes up from here, it can be negative for the yields. The German yields have bounced. But resistances are there to cap the upside and keep the downtrend intact. The yields have room to fall more. The 10Yr GoI is moving up in line with our expectation. The yield can rise further from here.

The US 10Yr (3.84%) and the 30Yr (4.17%) yields have risen and come close to their resistance at 3.85% (10Yr) and 4.2% (30Yr). If the yields breach this hurdle, there can be an extended rise to 3.95%-4% (10Yr) and 4.3% (30Yr) and then the downtrend can resume. We will have to wait and watch.

The German 10Yr (2.14%) and the 30Yr (2.46%) yields have bounced. Immediate resistance at 2.2% (10Yr) and 2.5% (30Yr) can cap the upside and keep the bearish view intact for a test of 2% (10Yr) and 2.2% (30Yr). The yields can reverse higher after this fall.

The 10Yr GoI (6.7765%) has risen sharply and is keeping intact our view of seeing 6.8% on the upside. 6.76%-6.75% can now be an immediate support.

Dow Jones is headed towards support near 41700/600 which if holds can produce a bounce back towards 42800/43000 in the medium term. Dax is falling as expected. If it bounces from 18900/800, it can resume upmove towards 19000/20000. Nifty has plunged below 25500 contrary to our expectations. It can test 25000 before pausing there. Nikkei is rising well and could target 39000/40000 while above 37500/38000. Thereafter, a dip can be seen from 40000 in the medium term. Shanghai is closed till 7th October.

Dow (42011.56, -0.44%) is inching down. But support in the 41700-41600 region can hold and keep the bullish outlook intact for a rise to 42800-43000. Only a fall below 41600 will negate the bullish view.

DAX (19015.41, -0.78%) is coming down towards 18900-18800 as expected. The uptrend can resume after this fall and take DAX up to 19800-20000.

Nifty (25250.10, -2.12%) has tumbled below 25500 contrary to our expectation to see a bounce from there. There is room to test 25000 after which a bounce is still possible to keep alive the chances of the rise to 26000-26500.

Nikkei (38729.68, +0.46%) is rising well and the view remains positive for the index to witness a rise towards 39000-40000, while the support near 38000-37500 holds.

Crude prices rose significantly amidst the escalation in conflict in the Middle East, with concerns that Iran and Israel may be on the cusp of a full-blown war. Brent can rise further towards 78-80 while WTI can target 76-77 on the upside. Gold, Silver and Copper looks ranged for the near term between 2700-2640, 32.5-30.50 and 4.5-4.8 respectively. Natural Gas looks bearish towards 2.7-2.6 while below resistance at 3. A break above 3, if seen can extend it to 3.2 before the expected decline is seen.

Brent ($ 77.60) has risen sharply to 77.9 yesterday as Biden said he was discussing with Israel if it were to decide to retaliate against Iram for its missile attack by bombing Iran’s oil facilities. In such a scenario, the export capacity could take a hit of 1.5mbpd of crude according to some market experts. While above 75 Brent can rise further towards 79-80 in the near term. A broad range of 80-70 can hold for some time.

WTI ($ 73.72) tested a high of 74.09 breaking above immediate resistance at 73 as tension prevails in the Middle East. While it sustains above 73-74 it can move further towards 76-77 in the near term. A broad range of 77-65 can hold for the medium term.

Gold (2678.10) trades within the mentioned range of 2700-2640 and can remain in this range for the near term until a breakout on either side takes place.

Silver (32.37) is holding below the immediate resistance at 32.5. While this holds the price can fall to 31.0-30.5 in the near term. Overall, a broad range of 32.5-30.5 can hold for some time.

Copper (4.5525) fell sharply to test its immediate support near 4.51 yesterday due to an intensified geopolitical scenario and a strong Dollar. While the support holds, a range of 4.5-4.8 can hold for some time.

Natural Gas (2.96) rose moderately to close higher yesterday after the EIA natural gas stockpile rose +55bcf, lower than the market expectation of +62bcf for week ended 27th Sep. The price is currently holding below resistance at 3. While below this level a fall towards 2.7-2.6 looks possible for the near term.

5:00 10:30 IN Services PMI
Expn 62.1 …Expected 58.9 …Previous 60.9

12:30 18:00 US NFP
Expn 135K …Expected 144K …Previous 142K

12:30 18:00 US Unemployment Rate
Expn 4.2% …Expected 4.2% …Previous 4.2%

12:30 18:00 US Avg Hrly Earnings
Expn 0.3 …Expected 0.3 …Previous 0.4

12:30 18:00 US Average Hourly Earnings Production & Non Supervisory Employees
Expn – …Expected – …Previous 0.4

DATA YESTERDAY:-
————–
0:30 06:00 Australia Trade Balance
Expn – …Expected 5.5 …Previous 5.6 …Actual 5.6

6:30 12:00 CH CPI
Expn 1.7 …Expected -0.1 …Previous 1.0 …Actual 0.8