The Dollar Index has risen past 102.75 and if sustained above current levels, can head towards 104 or higher in the near term. The Euro in line with our view can soon test 1.09 on the downside. The USDJPY and EURJPY have risen well. On the upside 150-152 and 164 respectively look like possible targets for now. Aussie, if breaks below 0.67, can get further dragged to 0.66-0.65 in the coming sessions. Watch price action closely around 0.67 to see whether it holds or not. The pound, either needs to rise past 1.31 or break below 1.30 to get further directional clarity. EURINR has slipped below 92 and may test 91 on the downside in the coming sessions. USDINR, below 84-84.10 can fall back towards 83.90/80 in the coming sessions. Watch out for the US CPI release scheduled today.

Dollar Index (102.855) edged higher yesterday as the market reflected confidence from the FOMC Minutes that the central bank will not continue easing so aggressively. Now, it needs to sustain above current levels to become further bullish to 104 or higher in the near term. Watch out for the US CPI release scheduled today for near-term directional clarity.

EURUSD (1.0943) is moving in line with our bearish view and can soon test 1.09 in the coming sessions. Thereafter, whether the support holds and the pair bounces back higher or extends the fall lower will have to be seen.

Dollar-Yen (149.24) and the EURJPY (163.24) have risen well on the Dollar strength today. If the rise sustains, they can get extended to 150-152 and 164 respectively in the near term before topping out.

USDCNY (7.0813) has indeed risen past 7.07 and if sustained can test 7.10 in the coming sessions. At the same time, we need to be cautious as China’s finance ministry will detail plans on fiscal stimulus to boost the economy on Saturday. If the markets take this news positively, then Yuan can appreciate and USDNY can fall back towards 7.05 to 7.00 or even lower in the medium term. Until then, the pair is likely to remain volatile.

Aussie (0.6717) tested 0.6762 on the upside before coming down. A confirmed break below 0.67 can drag it down to 0.66-0.65 in the near term. Immediate upside appears to be capped at 0.68 for now.

Pound (1.3067) will need to see either a rise past 1.31 or a fall below 1.30 to get further directional clarity. A sustained rise past 1.31 can take it towards 1.32 or higher in the near term with immediate downside limited to 1.30-1.29.

RBI kept interest rates unchanged at 6.50% as expected. USDINR (83.9675) continues to oscillate below the resistance near 84. For now, we are retaining our view of seeing a fall back to 83.90/80 in the coming sessions.

EURINR (91.8473) has slipped below the lower end of its range of 94-92. Further, if the fall continues, it can get extended to 91 in the coming sessions. Overall, the view remains bearish below 92.50-92.

The US Treasury yields are moving up inline with our expectation. Resistances are coming up which will need a close watch to see if the rise is halting there and reversing or not. The US CPI data release today might be key in deciding whether the yields can breach the resistances are not. A soft inflation number can trigger a reversal. We will have to wait and watch. The German yields are inching up. A strong follow-through rise from here can take them higher in the coming days. The 10Yr GoI has declined sharply below the support contrary to our expectation. A consolidation looks possible before the expected rise happens. The RBI left their policy repo rates unchanged at 6.5% in its meeting yesterday.

The US 10Yr (4.06%) and the 30Yr (4.34%) yields are seeing an extended rise towards 4.1% and 4.35%-4.4% respectively. The price action thereafter will need a close watch for a reversal towards 3.8% (10Yr) and 4% (30Yr) and lower.

The German 10Yr (2.26%) and the 30Yr (2.54%) yields are inching up. While they sustain above 2.2% (10Yr) and 2.5% (30Yr) a rise to 2.4% (10Yr) and 2.7% (30Yr) is possible.

The 10Yr GoI (6.7676%) fell sharply below 6.78% contrary to our expectation. A consolidation between 6.7% and 6.85% looks like a possibility before the rise to 7% happens over the medium term.

The Dow and DAX have surged above 42,500 and 19,200, respectively, averting downside risks. Both indices maintain a bullish outlook, potentially reaching targets of 43,000 and 19,800 respectively. Nifty faced rejection near 25,300 and closed slightly lower. As noted earlier, a rise above 25,200 is necessary to keep the bullish outlook intact else a dip back to 24800 can be seen. Nikkei remains stable above the 39,000 level. Shanghai failed to hold above the 3,300-3,400 range, reinforcing a bearish outlook with a potential decline towards 3,180.

Dow (42512, +1.03%) has surged and closed just above 42500. This keeps intact our bullish view of a rise to 43000.

DAX (19254.93, +0.99%) has risen above 19200 as expected. Our bullish view is intact now to see a rise to 19800-20000.

Nifty (24,981.95, -0.12%) has come down, failing to sustain the break above 25200. A revisit of 24800 cannot be ruled out. But, while above 24800 the chances are still alive to breach 25200 and rise to 25500-25600. Only a break below 24800 will bring it under pressure for a fall to 24500 and lower. Wait and watch.

Nikkei (39395.05, +0.30%) trades within the range of 38000-40000 as expected. A sustained rise past 39500 is required for it to extend upward towards 40000. Otherwise, the index may continue to oscillate in the sideways range for some more time.

Shanghai (3320.74, +1.90%) has fair chances of falling towards 3180 while below 3400-3300. Thereafter, we will have to wait and watch whether the fall can extend further down to 3050 or bounce back from there. Only a rise past 3400 if seen earlier, would negate our downside view.

Crude prices stumble as weekly crude inventories increase. While the immediate support levels hold, a bounce back to 80-81 on Brent and 76-77 on WTI looks possible for the near term. Gold and Silver hold above their immediate support. Gold looks ranged between 2620-2700 while Silver can bounce back towards 31.0-31.5. Copper and Natural Gas continue to fall and can target 4.3-4.2 and 2.6 respectively.

Brent ($ 77.15) fell sharply to a low of 75.15 as weekly crude oil inventories have come out higher than expected. While the immediate support at 75 holds, Brent can bounce back to 80-81 zone in the near term. Only a sustained break below 75 will trigger a fall towards 70.

WTI ($ 73.82) tested a low of 71.53 before closing slightly higher at 73.24. A sustained break below 72 is needed to see a fall towards the lower levels of 68-65. As long as 72 holds a bounce back to 76-77 can take place in the near term.

Gold (2632.20) dipped slightly but the support near 2620 is holding for now and while above this we expect a range of 2620-2700 to sustain for the near term.

Silver (30.83) dipped to 30.44 yesterday. While the immediate support at 30 holds we expect a bounce back to 31.0-31.5 in the near term.

Copper (4.4350) continues its downtrend and may target 4.3-4.2 on the downside.

Natural Gas (2.6450) may continue to fall towards 2.6 in the near term.

1:30 07:00 CN CPI (YoY)
Expn – … Expected – … Previous 0.6

1:30 07:00 CN PPI
Expn – … Expected – … Previous -1.8

12:30 18:00 US CPI (MoM)
Expn 0.2 … Expected 0.1 … Previous 0.2

12:30 18:00 US Core CPI (MoM)
Expn 0.2% … Expected 0.2% … Previous 0.3%

DATA YESTERDAY:-
————–
4:30 10:00 RBI Repo Rate
Expn 6.50% … Expected 6.50% … Previous 6.50% …Actual 6.50%

4:30 10:00 RBI Rev Repo Rate
… Expn 3.5% … Expected 4.5% … Previous 3.5% …Actual 3.5%

4:30 10:00 RBI MSF
… Expn 6.75% … Expected 6.75% … Previous 6.75% …Actual 6.75%