The Dollar Index and Euro are trading near the crucial resistance and support levels respectively. While the index holds below 106, the range of 106-103 can persist. Similarly, the Euro, above 1.06 is anticipated to bounce back higher. USDJPY is nearing the upper end of the range of 152-155, while EURJPY needs to rise above 164.70 to negate the fall to 162. AUDUSD continues to trade lower within the 0.67-0.65 region while the pound and EURINR have slipped below 1.29 and 90 respectively and are likely to be bearish towards 1.26 or lower and 89-88 respectively. USDCNY has risen well but an immediate resistance is coming around 7.25 below which a corrective fall can be seen. USDINR, on a confirmed break past 84.40 can head towards 84.50, else can see an initial fall to 84.30. Watch out for the US CPI & IN Trade balance releases scheduled today.

Dollar Index (105.955) extended its rally further to the high of 106.04 as the news suggests that Trump is looking to appoint Senator Rubio and also Congressman Waltz as the key foreign policy officials who are known for being quite hawkish on China. The index is trading near the crucial level of 106. For now we are expecting the resistance to hold and for it to come down within the 106-103 range. If the policies of Trump indeed support a stronger Dollar then we might have to revise our view but for now, we expect the range to hold. Only a decisive break past 106 if seen, can make the outlook further bullish.

EURUSD (1.0622) tested our mentioned target of 1.06 on Dollar strength. The pair is trading near the immediate support around 1.06, above which the preferred view is to see a bounce back in the coming sessions. At the same time, we need to be cautious for any sharp break below 1.06 which can then make it vulnerable to test lower levels of 1.05-1.04 before rising back. Watch price action near 1.06.

Dollar-Yen (154.72) is nearing the upper end of the range of 152-155. There is enough room for the pair to rise higher but a confirmed break past 155 will be needed for that. EURJPY (164.35), on the other hand remained subdued above 163 for the day. The anticipated fall to 162 cannot be negated until further rise is seen above 164.70.

USDCNY (7.2230) continues to rally on Tuesday as well. Note, that a crucial resistance is coming at 7.25 below which we anticipate a short corrective fall in the near term. Our view might be negated only if a sustained rise past 7.25 happens.

Aussie (0.6533) witnessed a low of 0.6534 before recovering a bit from there. Overall, the broad range of 0.67-0.65 can remain intact in the near term. Lower support is seen around 0.64.

Pound (1.2749) has indeed slipped below 1.28 and while below it, the view remains bearish to 1.26 or even lower before it attempts to rise back. Note the pound will have to rise past 1.28 to negate the expected fall.

USDINR (84.3975) needs to see a strong rise past 84.40 to head towards 84.50, else while below 84.40; a test of immediate support at 84.30 can happen soon.

EURINR (89.6368) continues to trade below 90 and could be vulnerable to see lower levels of 89-88.50 in the coming sessions.

The US Treasury yields have risen back sharply. But unless they see a sustained rise above their resistances, the bearish view of seeing a fall going forward cannot be ruled out. The US CPI inflation data release today will be important to watch. A lower CPI number will be negative for the yields. Currently the Headline CPI is at 2.41% (YoY) . The German yields have risen back. The bullish view is intact. The yields can rise more going forward. The 10Yr GoI is inching up slowly. It can go up towards the upper end of its current range in the coming days.

The US 10Yr (4.42%) and 30Yr (4.56%) yields have risen sharply contrary to our expectation. The 10Yr and the 30Yr has to get a sustained rise above 4.45% and 4.6% respectively to negate our bearish view of seeing a fall to 4.2%-4% (10Yr) and 4%-4.2% (30Yr). Only then a rise to 4.6% (10Yr) and 4.8% (30Yr) will come into the picture.

The German 10Yr (2.36%) and the 30Yr (2.56%) yields have risen back. While above 2.3% (10Yr) and 2.5% (30Yr) the bullish view is intact to see a rise to 2.6% (10Yr) and 2.8% (30Yr).

The 10Yr GoI (6.8295%) has come-off from the high of 6.8483%. But while above 6.8%, it can rise towards the upper end of its 6.8%-6.88%. A break above 6.85% can clear the way. Medium-term view remains bullish to break 6.88% and rise to 6.9% and 7%.

Global equity indices remain under selling pressure. Dow Jones turned from the resistance of 44400 and closed below 44000, indicating a corrective fall to 42000/41000. DAX fell to the support of 19000. A break below 19000 would negate our upside target of 19800-20000. Nifty broke below 24000 and closed above 23800; however, a fall below 23800 would extend the downside target to 23600-23500. The Nikkei retreated after reaching a high of 39866.72 and is now trading below 39000, suggesting a potential decline toward the trendline support at 38000. Meanwhile, the Shanghai Composite tested its support at 3400, falling to 3406. As long as the 3400 level holds, the index may aim for an upside target of 3500.
The Dow (43910.98, -0.86%) has come down sharply. We retain our view of seeing a corrective fall to 42000-41000 in the coming weeks. Upside will be capped at 44500.

DAX (19033.64, -2.13%) has come down sharply. A break below 19000 can take it down to 18700-18500. That in turn will negate our view of seeing the rise to 20000.

Nifty (23,883.45, -1.07%) broke below 24000 as expected. It can test 23800 and a break below it can drag it down to 23600-23500.

Nikkei (38953.09, -1.07%) appears bearish, with a potential decline toward the support level of 38000, followed by a possible rebound toward 39000. Overall, the outlook suggests that the index may hold above the support level in the near term.

Shanghai (3435.9601, +0.41%) is trading above 3400, signaling the potential for an upward move toward the 3500–3550 region.

Crude prices have fallen to their immediate support levels above which a bounce back to 74-76 (Brent) and 70-72 (WTI) is expected in the near term. Gold and Silver have tested their support levels, they and can bounce back towards 2650-2700 and 32 respectively. Copper has fallen sharply below 4.2 and can fall further towards 4.1-4.08 before a rise to 4.3-4.4 takes place. Natural has taken a reversal from its immediate resistance at 3 and can fall further towards 2.8-2.6 in the upcoming sessions.

Brent ($ 71.92) tested a low of 71.55 yesterday. OPEC+ has cut demand forecast this morning for this year which has showed some recovery in crude prices today. Immediate support is seen at 71 above which, a bounce back to 74-76 can take place in the near term.

WTI ($ 68.08) dips further towards its immediate support near 67 above which a bounce back to 70-72 can take place in the near term, giving a broad range of 67-72 for some time.

Gold ($ 2616.30) has tested its immediate support by falling to a low of 2595.70 yesterday, as expected. The support at 2600 can hold and push the price back towards 2650-2700 in the upcoming sessions.

Silver (31.02) is holding well above the support at 30.5 as the price bounced back above 31. It can extend the rise further towards 32 in the near term.

Copper (4.1605) plunged below 4.2 to test a low of 4.13 yesterday. Immediate support can be seen near 4.1-4.08 which can hold and push Copper higher towards 4.3-4.4 in the upcoming weeks.

Natural Gas (2.9060) tested a high of 3.01 before falling back to 2.90 yesterday, in line with our expectations. While the resistance at 3 holds, it can decline further towards 2.8-2.6 in the near term. A range of 3.0-2.6 can hold for some time.

10:00 15:30 EU Ind Prodn (MoM)
… Exp -0.6% …Expected -1.2% …Previous 1.8%

10:00 15:30 IN Trade bal
… Exp -29.0$ Bln …Expected – …Previous -20.8$ Bln

13:30 19:00 US CPI (MoM)
… Exp 0.1 …Expected 0.2 …Previous 0.2

13:30 19:00 US Core CPI (MoM)
… Exp 0.2% …Expected 0.3% …Previous 0.3%

DATA YESTERDAY:-
—————
7:00 12:30 UK Unemp
… Exp 4.1% …Expected 4.1% …Previous 4.0% …Actual 4.3%

12:00 17:30 IN IIP
… Exp 2.0% …Expected 2.5% …Previous -0.1% …Actual 3.1%

12:00 17:30 IN CPI
… Exp 4.89 …Expected 5.81 …Previous 5.49 …Actual 6.21