The Strong Dollar after the higher-than-expected US CPI (2.58% Y/Y%) weighs on most other currencies. While the Dollar Index shows further strength towards 107-107.35, the Euro can head towards 1.05/1.04 taking down the Aussie and Pound towards 0.6450-0.64 and 1.26/25 respectively. USDCNY has resistance near 7.25/26 from where a rejection can be expected. The Dollar Yen could continue to rise towards 157/158 while the Dollar Index extends its rally while EURJPY could see a slower rise towards 165. EURINR is bearish towards 88.50 while USDINR has scope to test 84.50 while above 84.30.

Dollar Index (106.589) extended its rally above 106 after the US CPI came out higher at 2.58% (Y/Y%) against market expectations of 2.40%. If the index does not decline immediately from here, it could head towards 107-107.35 in the near term.

EURUSD (1.0553) has broken below the 1.06 support on the sharp rally on the Dollar Index above 106. Euro could head towards 1.05-1.04 while below 1.06 unless an immediate pullback is seen above 1.06 in the next few sessions.

Dollar-Yen (155.89) has broken above the 152-155 range we have been looking at for the last few days. If the rising momentum sustains, it could soon test 157-158.

EURJPY (164.53) has been stable with a mild rise. The pair can test 165 before pausing the current rise.

USDCNY (7.2426) is headed towards resistance near 7.25/26 which may hold and produce a corrective fall by early next week. Watch price action around 7.25/26.

Aussie (0.6479) has broken below 0.65 as expected and is now headed towards 0.6450-0.64 from where a bounce can be expected.

Pound (1.2690) has broken below 1.27 on Dollar strength. The pound could move down further towards 1.26/25 before the bears could halt.

USDINR (84.3825) continues to trade around 84.40 with chances of testing 84.50 on the upside. Immediate support at 84.30 holds intact.

EURINR (89.1325) looks bearish and is headed towards 89-88.50.

The US Treasury yields have risen above their resistance contrary to our expectation. If this break sustains, more rise is possible going forward. In that case our view of seeing a fall will go wrong. The inflation data release for the month of October showed an uptick. The US Headline CPI rose by 2.58%, up from 2.41% seen in September. The US Core CPI rose by 3.3%, up from 3.26% over the same period. The German yields continue to move up and are keeping intact our bullish view. The yields have room to rise further. The 10Yr GoI is moving up within its range in line with our expectation. It can inch up towards the upper end of the range.

The US 10Yr (4.48%) and 30Yr (4.66%) yields have risen above 4.45% and 4.6% respectively. If this rise sustains, then 4.6% (10Yr) and 4.8% (30Yr) can be seen on the upside. Our view of seeing a fall to 4.2%-4% (10Yr) and 4%-4.2% (30Yr) will go wrong then.

The German 10Yr (2.38%) and the 30Yr (2.57%) yields have inched up. The outlook is bullish. The yields can rise to 2.6% (10Yr) and 2.8% (30Yr) while they sustain above 2.3% (10Yr) and 2.5% (30Yr).

The 10Yr GoI (6.8374%) continues to inch up inline with our expectation towards the upper end of its 6.8%-6.88% range. Eventually we expect a break above 6.88% and rise to 6.9% and 7%.

The Dow Jones surged to 44141.33 before retreating to close below 44000. We maintain our outlook for a potential decline toward 42000-41000 while the index remains capped below 44500. The DAX dropped to a low of 18838 before closing around 19000. A failure to sustain above 19000 could drive the index lower, with targets at 18700–18500. The Nifty broke below 23800, subsequently falling below 23600 too. Further, it has room to witness a fall to 23500–23300, even to 23000. However, at the same time, a possible corrective bounce to 23800 cannot be ruled out. The Nikkei, after attempting a rise to 39084, has declined to 38600. Immediate support exists at 38500; a break below this level could extend losses to 38000. Shanghai is holding above 3400 and looks bullish towards 3500-3550.

The Dow (43958.19, +0.11%) is attempting to bounce. But we reiterate that the upside will be capped at 44500 and the Dow Jones can fall to 42000-41000 going forward.

DAX (19003.11, -0.16%) looks vulnerable to break 19000 and fall to 18800-18500. That will negate our view of seeing a rise to 20000.

Nifty (23,559.05, -1.36%) has come down towards 23500 as expected. A corrective bounce to 23800 cannot be ruled out. But the view continues to remain bearish. A break below 23500 can drag the Nifty down to 23000.

Nikkei (38760.97, +0.10%) appears bearish, with interim support at 38500. A break below this level could prompt further decline toward the next support at 38000. Conversely, if the 38500 support holds, it could lead to a rebound, pushing the index higher toward the 39000–39500 region.

Shanghai (3425.4052, -0.40%) trades above 3400. While it holds above 3400, a rise towards 3500-3550 looks possible.

Crude prices have recovered after testing their immediate support levels while Metals have declined on a strong Dollar. Crude prices could bounce back towards 74-76 (Brent) and 71-72 (WTI) while above support levels. Gold could fall to 2550-2500 while below 2600. Silver and Copper may remain subdued for a few more sessions before attempting to rise. Natural Gas has risen sharply and can fall in the near term while below 3. A range between 3.0-2.6 looks likely for the medium term.

Brent ($ 72.20) tested a low of 70.71 before seeing a recovery above 72. The recovery occurred after Russian President Putin and Saudi Crown Prince Mohammed bin Salman emphasized the need for continued coordination within OPEC+. Their remarks hinted at a possible delay in the planned oil production cuts if prices stay lower. A further rise towards 74-76 can take place in the upcoming sessions, giving a broad trade range of 76-71 for some time.

WTI ($ 68.28) has tested its immediate support at 67 as expected before bouncing back above 68. It can rise further towards 71-72 in the near term. Overall, a broad range of 67-72 can hold for some time.

Gold ($ 2567) has broken slightly below its crucial support at 2600 on Dollar strength. We would have to see whether the fall sustains and confirms further bearishness towards 2550-2500 as the Dollar looks strong. A break past 2600 is needed to revise our targets upwards.

Silver (30.23) tested a high of 31.26 before falling back to its immediate support at 30.50. While the support holds a bounce back to 31.50-32.0 can take place in the upcoming sessions. However, if a strong Dollar weighs on the Silver price, it can test 29 again in the near term before the expected bounce is seen.

Copper (4.0525) has fallen sharply. Unless it rises back immediately, it could be vulnerable to fall towards 4.0-3.9 in the near term.

Natural Gas (2.9670) saw an initial fall to 2.83 before bouncing back sharply to close above 2.9. As long as the immediate resistance at 3 holds a fall to 2.8-2.6 remains intact. A range of 3.0-2.6 can hold for some time.

6:30 12:00 IN WPI
… Exp 1.96% …Expected 2.20% …Previous 1.84%

10:00 15:30 EU GDP
… Exp – …Expected 0.2% …Previous 0.2%

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 PPI
… Exp 0.0% …Expected 0.2% …Previous 0.0%

13:30 19:00 US PPI ex Food & Energy (MoM)
… Exp 0.3 …Expected – …Previous 0.2

DATA YESTERDAY:-
—————
13:30 19:00 US CPI (MoM)
… Exp 0.1 …Expected 0.2 …Previous 0.2 …Actual 0.2

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