The Dollar Index moved up significantly on high US Manufacturing ISM at 48.4. The view remains bullish towards 107-108 in the near term while above 105.50. Euro and EURINR are coming off towards 1.04 and 88 respectively as expected. Aussie and Pound are likely to remain ranged within 06.550-0.6400 and 1.2750-1.2450. USDCNY has moved up sharply on Dollar strength and if sustained can test 7.30-7.35 in the near term. USDJPY needs to see a sustained rise past 150 to head towards 152-154 in the coming sessions. EURJPY tested 156.38 and now we need to see whether the support at 156 holds and the pair bounces back or extends the fall further. USDINR has risen to the high of 84.7050 but has immediate resistance at 84.78/80 which can hold for now.

The higher than expected US ISM Manufacturing Index at 48.4 (47.7) led Dollar Index (106.562) to shoot up sharply to the high of 106.73. While the support at 105.50 holds, the overall view remains bullish towards 107-108 in the coming sessions.

EURUSD (1.0485) and EURINR (88.9045) are coming off in line with our bearish view and can soon test 1.04 and 88 respectively in the near term. Thereafter, whether the fall extends further or halts near the mentioned levels will have to be seen.

Dollar-Yen (149.87) failed to sustain its rise past 150 and started coming off from the high of 150.75 despite the Dollar strength. Only a sustained rise past 150 can take it higher to 152-154. Else, failure to do so can make it vulnerable to test 148-145 in the near term.

EURJPY (157.16) witnessed a low of 156.38 in line with our bearish view towards 156, before recovering a bit from there. Need to see whether the support holds and the pair bounces back again towards 160-162 or slips below 156 to the lower levels of 155-152 in the near term. For now, while the support holds, it has a chance to rise back higher.

USDCNY (7.2714) rose sharply to the high of 7.2730 on Dollar strength. Now while the rise sustains above 7.27, a test of 7.30-7.35 looks likely. Overall, the view remains bullish above 7.25.

Aussie (0.6461) is trading lower within the earlier-mentioned range of 0.6550-0.6400. The range can hold for now until a break can be seen on either side of it. Charts have enough room to see a fall towards 0.635 but a confirmed break below 0.64 will be needed.

Pound (1.2642) can continue to trade within its broad range of 1.2750/70-1.2450 can hold for a while.

USDINR (84.4875) extended the rise past 84.60 to the level of 84.7050 much sooner than expected. Immediate resistance might be in the 84.78/82 region. RBI might try to and be able to protect that in the near term. If so, Dollar-Rupee could dip back towards 84.60, or max 84.50.

The US Treasury yields have bounced back slightly. Support is there to limit the downside from here. While the supports hold, the yields can rise back in the coming days. The German yields continue to fall and are coming close to their support. We will have to wait and see if the supports are holding well and producing a bounce. The 10Yr GoI has declined further. There is room for more fall from here before a reversal happens.

The US 10Yr (4.20%) and 30Yr (4.37%) have bounced slightly. Supports at 4.15% (10Yr) and 4.3% (30Yr) have to be broken to see the fall to 4% (10Yr) and 4.2% (30Yr) mentioned yesterday. While these supports hold, the yields can rise back to 4.4%-4.5% (10Yr) and 4.65%-4.7% (30Yr).

The German 10Yr (2.03%) and the 30Yr (2.27%) yields are coming down towards 2% and 2.2% respectively. The price action thereafter will need a watch to see if a bounce is happening or not. We will have to wait and watch.

The 10Yr GoI (6.7478%) continues to fall. It can test 6.7%-6.75% and then rise back again.

The Dow Jones retreated after failing to rise above 45000, signaling potential weakness. A decline toward 43000 could materialize while it remains below 45000. DAX exceeded expectations by breaking decisively above 19900 and is positioned to advance further, targeting 20000–20300 in the coming sessions which can advance to even 20500/700. Nifty held firm above 24000 and is headed towards 24400, making price action around this level crucial to observe future trends. The Nikkei 225 and Shanghai are headed towards resistances near 39500 and 3400 respectively which if held could lead to a decline. Only a break above these resistances can lead to a further rally.

The Dow (44782, -0.29%) is hovering around 45000. We reiterate that 45000 is a strong resistance. While that holds, we expect a fall to 43000 first and then to 42000-41000 going forward. A sustained rise above 45000 is needed to negate this view.

DAX (19933.62, +1.57%) is coming close to test 20000 as expected. Outlook is bullish. The upside can extend even up to 20500-20700.

Nifty (24276.05, 0.60%) has risen and is holding well above 24000. Key resistance to watch is at 24400 which has to be broken to strengthen the bullish to revisit 25000 and higher levels again.

Nikkei (39180.01, +1.73%) has risen above 39000 and could encounter resistance at 39500, which could limit further gains. However, if the bullish momentum continues and a decisive break above 39500 is seen, a rally to 41000–42000 could be in place. Watch price action near 39500.

Shanghai (3352.5915, -0.31%) is trading near 3350, with potential to rise toward the resistance at 3400 from where a near term dip is possible towards 3300-3250. A near term range of 3250-3400 could hold till a breakout is seen on either side.

Crude and metals trade in a narrow range. Brent and WTI are stuck between $ 71-73 and $ 67-70. The prices need to break above the upper end of the ranges to turn bullish for the near to medium term. Gold, Silver, Copper, and Natural Gas have important supports near 2650, 30.50, 4.05, and 3.10/3.00 respectively which need to hold and produce a bounce for the prices to start moving up eventually. Till such a bounce is seen, the prices may trade in a narrow range just above the mentioned support levels, delaying the expected rise.

WTI ($ 67.95) has scope to test $ 67 before bouncing back towards $ 69.50-70. A near term range of $ 70-67 can be held for the next few sessions. At the same time Brent ($ 71.73) has support at levels just above $ 71 which if holds can take it higher towards $ 73. Overall, both WTI and Brent can trade within a very narrow range for the next few sessions. A breakout thereafter will be crucial.

Gold ($ 2659.90) has been trading in a very narrow range for the past 4-5 sessions, holding above 2650. Narrow range of 2650-2700 and broad range of 2700-2600 could hold for some time before a breakout is seen above 2700 in the medium term.

Silver (31.02) is stuck near the support at 30.50. It will have to break above 31.50 to head higher and rally while the overall trend remains bullish.

Copper (4.12) has dipped slightly but has support near 4.05-4.00 which can hold and produce a rise towards 4.20 eventually. A broad range of 4.05-4.20 can hold for a couple of weeks.

Natural Gas (3.2040) is headed towards support near 3.1-3.00 region which needs to hold and produce a bounce back for the price to move back towards 3.5-3.6 eventually. It would be a concern only if the price falls back below 3 which looks unlikely at the moment.

7:30 13:00 CH CPI
… Exp 1.1 … Expected – … Previous 0.7

DATA YESTERDAY:-
—————
0:30 06:00 JP PMI
… Exp 49.4 … Expected 49.0 … Previous 49.2 …Actual 49

1:45 07:15 CN PMI
… Exp 49.2 … Expected 50.6 … Previous 50.3 …Actual 51.5

5:00 10:30 IN Manufacturing PMI
… Exp 57.4 … Expected 57.3 … Previous 57.5 …Actual 56.5

8:30 14:00 CH PMI
… Exp 50.7 … Expected 49.6 … Previous 49.9 …Actual 48.5

9:00 14:30 EU PMI
… Exp – … Expected – … Previous 46.0 …Actual 45.2

9:30 15:00 UK PMI
… Exp 54.3 … Expected 48.6 … Previous 49.9 …Actual 48

10:00 15:30 EU Unemp
… Exp 6.4% … Expected 6.3% … Previous 6.3% …Actual 6.3%

14:00 19:30 US Manufacturing ISM
… Exp 46.0 … Expected 47.7 … Previous 46.5

14:30 20:00 CA PMI
… Exp – … Expected 50.8 … Previous 51.1