The Dollar Index is bullish towards 104 and the Euro is weak towards 1.08 ahead of the ECB policy meeting where markets expect a 25bps rate cut. USDJPY and EURJPY are struggling to rise and could stabilize or fall towards 146.50 and 160 respectively. The fall could be delayed in case of a rate cut by the ECB today. Aussie needs to sustain trade above 0.67 to rise back towards 0.68 or higher while Pound trades just below 1.30 and needs to move back to prevent further decline to 1.29. USDCNY and USDINR face resistance near 7.1240 and 84.12 respectively and while that hold, the pairs can attempt to dip towards 7.08/05 and 83.90 respectively in the near term. EURINR needs to bounce back from 91 to prevent a sharp fall to 90 else could be bearish for the next few sessions.

Dollar Index (103.488) looks bullish for the near term. There is enough room for a rise towards 104-106 in the coming weeks. Overall view is bullish above 102.50.

EURUSD (1.0864) has slipped below 1.0875 and looks bearish for a fall towards 1.08 soon. Any corrective rise seen from here could be limited to 1.0950. With the ECB policy meeting due today, if the central bank cuts rates, the Euro could fall to 1.08 faster. Markets expect a 25bps rate cut.

Dollar-Yen (149.35) and the EURJPY (162.27) look stable just now and seem to be losing out the upside momentum. The corrective rise seen over the last 1-month could get exhausted and pairs could start to stabilize below 152.50 and 164 respectively and start to eventually resume their long-term downtrend soon targeting 146.50 and 160 initially.

USDCNY (7.1179) is bearish while below immediate resistance near 7.1240 and can potentially push the spot down towards 7.08/05. A break above 7.1240 is needed to keep the upside momentum intact and lead to a further rise towards 7.15/20.

Aussie (0.6703) has bounced well from yesterday’s low of 0.6658 and needs to sustain the rise to head towards 0.68 or higher again in the near term.

Pound (1.2997) is trading just below 1.30 and needs to bounce back from current levels to rise back towards 1.31 and higher. Failure to rise immediately can drag it to 1.2950-1.29 before the expected reversal occurs. Watch price action near current levels.

USDINR (84.00) traded within 84.0725-83.98 yesterday. While below the resistance at 84.12, there is a fair chance for the pair to fall towards 83.90/80 in the coming days.

EURINR (91.2640) has broken below 91.35 and is headed towards 91. Unless an immediate rise above 91.35 is seen in the near term, it will be difficult for the pair to turn bullish and can drag itself down towards 90. Watch price action near 91.

The US Treasury yields remain stable. A further fall from here can drag them down in the coming days. We will have to wait and watch. The German yields have come down below their support. While this break sustains, the yields can fall more. That will negate our earlier bullish view. The ECB meeting outcome today will need a close watch. We expect the rates to be unchanged in this meeting. The 10Yr GoI retains its range. The sideways consolidation can continue for some more time before a rise is seen.

The US 10Yr (4.03%) and the 30Yr (4.32%) yields remain lower but stable. We repeat that a fall below 4% (10Yr) and 4.3% (30Yr) can drag the yields down to 3.8% (10Yr) and 4% (30Yr) and will keep the broader downtrend intact. A rise above 4.1% (10Yr) and 4.4% (30Yr) is needed to negate this fall.

The German 10Yr (2.18%) and the 30Yr (2.47%) yields have declined below 2.2% (10Yr) and 2.5% (30Yr). A further fall from here will negate the earlier bullish view and can drag the yields down to 2% and 2.3% from here. That will prove that the recent rise above 2.2%% (10Yr) and 2.5% (30Yr) was a false breakout.

The 10Yr GoI (6.7722%) tested 6.75% and then bounced back. The narrow 6.75%-6.8% range is intact. 6.7%- 6.85% could be a slightly wider range of trade possible. The bias is bullish to break 6.85% eventually and rise to 7% over the medium term.

Dow Jones has risen above 43000. While it holds above 42500/600, a rise toward 44000 can be expected. Whereas, DAX, Nifty, and Nikkei have extended the losses and broken below 19500, 25000, and 39000, failure to rise above the mentioned levels would take the indices further down to the support levels of 19200-19000 for DAX, 24800/750 for Nifty, and 38000 for Nikkei. On the other hand, Shanghai has held the support of 3200 and could move up slowly within the range of 3200-3300.

The Dow (43077.70, +0.79%) has risen back above 43000. While above 42600-42500, we retain our bullish view of seeing a rise to 44000. A break above 43450 can trigger that rise.

DAX (19432.81, -0.27%) has come down further. Support at 19200-19000 can limit the downside. The broader uptrend is intact and the DAX can rise to 19800-20000.

Nifty (24,971.30, -0.34%) has dipped below 25000. A test of 24800-24750 looks likely to be tested first and then a rise back is possible. A fall below 24750 if seen can drag the Nifty down to 24500-24300 and lower. Watch the price action in the 24800-24750 region.

Nikkei (38979.75, -0.51%) has dropped below 39000 but is currently holding above 38800. While below 39000, there is room for a decline towards 38600-38000. Thereafter, a bounce towards 40,000 and higher can be seen.

Shanghai (3209.43, +0.20%) continues to trade in the mentioned range of 3200/3180-3300 and is expected to slowly start moving towards the upper end of the range towards 3300. The view is bullish above 3180/3200.

Crude prices remain lower. Brent and WTI can fall towards 71/70 and 68/67 respectively in the near term. Gold can fall within the narrow range of 2700-2640/2620 while below resistance near 2700. Silver and Copper have risen slightly, Silver can target 32.5-33.5 on the higher side while Copper remains bearish towards 4.30-4.25 in the near term. Natural Gas needs to break below 2.35 to confirm further bearishness towards 2.2-2.1.

Brent ($ 74.53) has attempted to rise slightly but while below $ 75, the view continues to remain bearish towards $ 71/70. Thereafter, if 70 holds, a bounce back towards $ 75/78 can take place. Else, a sustained break below $ 70/68 would turn out bearish for Brent towards $ 65-60 eventually.

WTI ($ 70.57) also looks bearish below $ 72 and has scope to fall towards $ 68/67 soon.

Gold (2695) tested resistance near 2702.5 yesterday. While the resistance holds a dip to the lower end of the 2700-2640/2620 range can be possible. Thereafter, a breakout on either side of the range is needed for further clarity on direction for medium term.

Silver (31.73) tested a high of 32.39 yesterday. A further rise towards 32.5-33.5 can take place in the near term. Thereafter, while 33.50 holds as immediate resistance, Silver can revert back to 32-31.50.

Copper (4.3585) rose slightly to 4.3950 yesterday but as long as it holds below 4.4, it can continue to fall towards its immediate support at 4.30-4.25 in the near term. Else, a rise above 4.4 can take it towards 4.6/4.7 again in the coming week.

Natural Gas (2.3730) fell sharply to a low of 2.3580 as US forecasts for mild autumn weather, which would reduce heating demand for nat-gas. Immediate support at 2.35 needs to be broken to see a fall towards 2.2-2.1. Else if 2.35 holds a corrective rise towards 2.5-2.6 can be seen before continuing its downtrend.

1:30 07:00 Australia Labour Force
Expn – … Expected 25.2K … Previous 47.5K

9:00 14:30 EU CPI (YoY)
Expn 2.0% … Expected – … Previous 1.8%

11:45 17:15 ECB Mtg
Expn 3.65% … Expected 3.40% … Previous 3.65%

12:30 18:00 US Retail Sales (MoM)
Expn 0.1% … Expected 0.3% … Previous 0.1%

12:30 18:00 US Philifed Index
Expn – … Expected 4.2 … Previous 1.7

13:15 18:45 US Industrial Production
Expn 0.3 % … Expected -0.1% … Previous 0.8%

13:15 18:45 US Capacity Utilization
Expn 78.0% … Expected 77.9% … Previous 78.0%

13:00 01:30 US TICS (Net foreign purch of long-term Sec)
Expn – … Expected – … Previous 135.4

DATA ON YESTERDAY:
—————
6:00 11:30 UK CPI Y/Y
Expn 2.1% … Expected 1.9% … Previous 2.3% …Actual 1.7%

10:00 15:30 IN Trade bal
Expn -25.8 … Expected – … Previous -29.7 …Actual -20.8