The Dollar Index moved up a bit on good US Durable goods Data on Friday. The upside looks capped at 105-105.50 region and either from current levels or upon testing the target, it is likely to fall back towards 103.00-102.50 in the medium term. Euro, on the other hand, can test the support around 1.0770/50 again before bouncing back stronger. USDJPY and EURJPY extends the rise further as the Prime Minister Shigeru Ishiba’s Liberal Democratic Party lost its parliamentary majority. If the rise extends further, a test to 155 and 168 looks likely to happen in the near term. Aussie could be headed towards 0.65, while below 0.66. Pound remains stable within 1.2900-1.3150 region. USDCNY looks a bit uncertain for now but has room on the upside towards 7.1436 and 7.1751. Failure to sustain above current levels can drag it down towards 7.10 or even lower. USDINR is likely to remain ranged within 84.00-84.12 for the week. EURINR can trade within the range of 90.50/90-91.50 for a while.

US Durable goods came higher than expected at -0.8% (-1.1%) which led Dollar Index (104.505) to rise a bit. Currently, it has risen past 104.50 and if sustained, can test the higher resistance around 105-105.50 region before topping out. Overall, either from current levels or upon testing 105-105.50, the index is likely to fall back towards 103-102.50 in the medium term.

EURUSD (1.0791) has been coming off from the high of 1.0831. The fall, if continues, can drag it again towards the support around 1.0770/50 region before it bounces back stronger towards 1.0850-1.0900 in the medium term.

The rise continues in Dollar-Yen (153.68) and EURJPY (165.78) as Japan’s ruling coalition Prime Minister Shigeru Ishiba’s Liberal Democratic Party lost its parliamentary majority. The markets are now speculating a higher risk of economic policy becoming more dovish. Going ahead, if the current rise sustains, a test to 154-155 and 168 respectively looks likely in the near term.

USDCNY (7.1307) continues to remain uncertain in the near term. The possible targets on the upside could be 7.1436 and 7.1751. At the same time failure to sustain above current levels can drag it towards 7.10 or even lower in the near term.

Aussie (0.6598) has broken below 0.66 and could have scope to fall towards 0.65 in the near term if it does not bounce back immediately above 0.66. Watch price action closely near current levels to see if the fall sustsians from here.

Pound (1.2952) continues to remain stable within its range of 1.2900-1.3150 which can persist for a while. A decisive break on either side will be needed for further directional clarity.

USDINR (84.0750) traded within a narrow 5 paise range of 84.04-84.09 last week. Given the extremely low volatility going on, we anticipate that the range of 84.00-84.12 can hold for the current week as well.

EURINR (90.7363) can trade within the immediate range of 90.50/90-91.50 in the near term.

The US Treasury yields have risen back well above their resistances. That keeps the door open for the yields to rise more from here before resuming their downtrend. The German yields sustain higher. The outlook is bullish, and the yields can move up in the coming days. The Indian 10Yr GoI has risen towards the upper end of its current range. We expect the yield to break the range on the upside and continue to rise going forward. We will have to see if the range breakout is happening now or not.

The US 10Yr (4.27%) and the 30Yr (4.53%) yields have risen back well above 4.2% and 4.5% respectively. That keeps intact the view of seeing a rise to 4.4% on the 10Yr while above 4.2%. The 30Yr on the other hand has to sustain above 4.5% to go up to 4.6% and higher. After this rise, the yields can resume their downtrend.

The German 10Yr (2.29%) and the 30Yr (2.59%) yields remain stable. While above 2.2% (10Yr) and 2.5% (30Yr) the outlook is bullish. The yields can rise to 2.4% (10Yr) and 2.7% (30Yr).

The 10Yr GoI (6.8495%) has reversed higher. A break above 6.85% will open the doors for the rise to 7%. Else the 6.8%-6.85% range can continue for some more time.

The Dow Jones tested support at 42000 and is holding above it. While it sustains above the 42000-41800 support region, the outlook is positive with a potential to rise towards 44000. The Dax holds firm above 19400 and as long as it stays above the 19200-19000 support zone, it appears bullish towards 19800-20000. Nifty dropped below 24200. Further, it needs to hold above 23900-24000 to move higher else can head towards 23800/500 on the downside. The Nikkei has risen sharply as the Liberal Democratic Party lost its majority in Japan elections. If the rally continues, it could soon test 39500-40000 by the end of this week. Shanghai faced sessling pressure above 3300 and buying pressure around 3200/3250 through last week. Price action around 3300 would be important to watch with an immediate range of 3250-3350 likely for this week.

The Dow (42114.40, -0.61%) is coming down towards 42000-41800. We expect the Dow to sustain above 41800 and resume the uptrend. While above 41800 our broader view of seeing 44000 on the upside remains intact.

DAX (19463.59, +0.11%) is managing to sustain above 19200 but seems to lack strong buying. The broader view is bullish to see a rise to 19800-20000. But it is not clear if a dip to 19200-19000 will happen before that rise or not.

Nifty (24180.80, -0.90%) looks vulnerable for a fall to 23800-23500 from here. But a relief rally to 24500 is a possibility before further fall happens.

Nikkei (38530.89, +1.63%) has moved up well today, currently trading above 38500. If the rise continues, a test of 39500-40000 could come into the picture by end of this week.

Shanghai (3306.98, +0.26%) has also risen slightly today, trading above 3300. An immediate range of 3250-3350 can hold for the near term. Thereafter, a break above 3350 is needed for further bullishness in the medium term.

Crude prices have dipped today but seem to be holding above supports of 71.50 (Brent) and 67.83 (WTI). While the supports hold, a rise towards 75-76 (Brent) and 71-72 (WTI) looks possible. Gold and Silver look bullish towards 2800 and 35.5 respectively while above their immediate support levels of 2700 and 33.5. Copper could be narrowly range between 4.4-4.3 for some time. Natural Gas needs to hold above 3 to see further bullishness towards 3.5-4.0 eventually, else can fall back towards 2.8-2.5. Watch price action near 3.

Brent ($ 72.80) has risen above $ 75 last week due to tensions prevailing in the Middle East but opened with a gap down today, trading below $ 73. There could be immediate support near 71.50 which if holds can push the price back towards $ 75-76 in the near term. Thereafter, if the Iran-Israel war continues to worsen, there could be scope for a rally to $ 77-78 on the upside. Only a break below $ 71.50-71.00 can prevent such a rise and instead take it lower towards $ 70/68 (looks less likely just now)

WTI ($ 68.58) also trades lower today, bouncing from immediate trend support at 67.83 on the daily candles. While above support, a rise to $ 71-72 looks possible.

Gold ($ 2746.50) is holding well above 2720-2700. It can continue to rise towards earlier mentioned levels of 2780-2800 in the near term.

Silver (33.63) tested a low of 33.26 but couldn’t sustain lower and close higher at 33.88 on Friday. Immediate support at 33.5-33.00 is holding well and while above this we expect a further towards 34.5-35.5 in the upcoming 1-2 weeks.

Copper (4.3555) is holding within the narrow range of 4.4-4.3 and can remain within this range for some time. Thereafter, near term support at 4.3 can hold and push the price higher towards 4.5-4.6.

Natural Gas (3.0180) has dipped today heading towards 3.00. We will have to see whether it stays higher or falls back below 3. While above 3 it can rise higher towards 3.5-4.0 in the upcoming months which is our preferred view too. But if it falls back below 3 then it can decline further towards 2.5. Watch price action near 3 which would be the crucial indication of further direction from here.

No major data release today.

DATA ON FRIDAY:
—————
23:05 04:35 UK Cons Conf
… Exp -21.0 … Expected -20.0 … Previous -20.0 … Actual – 21.0

8:00 13:30 GER IFO Business Climate
… Exp 84.9 … Expected 85.6 … Previous 85.4 … Actual 86.5

8:00 13:30 GER IFO Business Situations
… Exp 84.7 … Expected 84.4 … Previous 84.4 … Actual 85.7

8:00 13:30 GER IFO Business Expectations
… Exp 84.1 … Expected 86.8 … Previous 86.4 … Actual 87.3

12:30 18:00 US Durable Goods Orders
… Exp – … Expected -1.1% … Previous – 0.8% … Actual -0.8%