The Dollar Index needs to see a decisive break past 106.75 to head back towards 107-108. Euro has a bullish bias towards 1.0600-1.0650, while above 1.05. Since we are bullish on the Dollar Index and the Euro at the same time, one of the views can go wrong after the US CPI scheduled today or after the ECB policy meeting tomorrow and can give us further directional clarity. EURINR can remain within 88-90 for now. Aussie has slipped below 0.64 again and if the fall continues, can get extended to 0.6350-0.6300 before possibly bottoming out. The pound needs to hold above 1.27 and rise past 1.28 to head towards 1.28-1.30, else can continue to fall within its range of 1.2770-1.2450. USDCNY looks a bit uncertain for now but if the fall continues, it can extend to 7.22-7.20 in the near term. USDJPY can rise higher towards 154-155 in the coming sessions while above 150. EURJPY remains bullish towards 162-163, while above 156. USDINR tested 84.85 yesterday. It has an immediate resistance around current levels which, if held, can bring the pair back towards 84.75-84.70 else can rally towards 84.95-85.00 much faster and sooner than expected.

Dollar Index (106.272) rose sharply to the high of 106.637 before cooling down a bit. Markets might be preparing for the US CPI release scheduled for today. A strong break past 106.75 if seen, can confirm the anticipated rise to 107-108 in the near term. The index will have to decisively break below 105.50 to turn further bearish.

EURUSD (1.0536) tested the low of 1.0498 on Dollar strength before rising back. While the support around 1.050 holds, a rise to 1.060-1.0650 is possible in the near term. Although both the Dollar Index and the Euro look bullish above 105.50 and 1.05 respectively, we might have to wait for the US CPI today and ECB tomorrow to turn wrong on one of them to get further directional clarity.

EURINR (89.4243) is likely to remain volatile within its range of 88-90 in the near term.

Dollar-Yen (151.52) tested our initial target of 152 but could not sustain and started coming off from the high of 152.184 itself. While above 150, it has a scope to extend its rise towards 154-155 in the near term. Bearishness will only strike in on a decisive break below 150. Else, its earlier range of 150-155 can persist for a while.

EURJPY (159.70) has gradually risen in line with our view so far and if sustained, can head towards 162-163. Overall, the view is bullish while the cross trades above the support at 156-157.

USDCNY (7.2445) had slipped to a low of 7.2387 before recovering a bit from there. Outlook continues to remain uncertain for the time being, but if the fall continues further, it can test 7.22-7.20 on the downside. The pair will have to see a sustained rise past 7.25 to turn bullish again.

Aussie (0.6382) failed to see a rise past 0.6450 and instead came down significantly after the news that China’s imports unexpectedly shrank, affecting expectations for the Australian economy, as China is its largest trading partner. If the fall continues further, a test of 0.6350-0.6300 can be seen before bottoming out.

Pound (1.27770) needs to see a strong break past 1.28 to bring 1.30 back into the picture. Else while below 1.28, the pair could be vulnerable to see a break below 1.27 and get further dragged within its earlier range of 1.2750/70-1.2450.

USDINR (84.8570) tested the upper end of its range of 84.65-84.85 yesterday. Now, immediate resistance is coming around 84.85/87 which if holds can lead to a dip towards 84.75-84.70 in the near term.

The US Treasury yields have risen further. Need to see if it can rise past the immediate resistance which is needed to rise more and avoid a fall back. The US CPI data release today will be important to watch. That will be key in determining whether the yields can breach the upcoming resistance or not. The German yields remain stable. Downside is limited from here. We can expect the yields to rise either from here itself or after some more dip. The 10Yr GoI remains lower. It can fall in the near-term to test its key support and then see a reversal.

The US 10Yr (4.23%) and 30Yr (4.42%) have risen further. Need to see if they get a strong follow-through rise above 4.25% (10Yr) and 4.45% (30Yr). If that happens, the rise to 4.4%-4.5% (10Yr) and 4.65%-4.7% (30Yr) can happen straight away without seeing a fall to 4% (10Yr) and 4.2% (30Yr).

The German 10Yr (2.12%) and the 30Yr (2.35%) yields remain stable. Downside is limited to 2% (10Yr) and 2.2% (30Yr) if a fall below 2.1% (10Yr) and 2.3% (30Yr) happens from here. While above 2% (10Yr) and 2.3% (30Yr) a rise to 2.3% (10Yr) and 2.5% (30Yr) can be seen.

The 10Yr GoI (6.7493%) continues to trade lower. A fall to 6.7%-6.65% is likely while the yield remains below 6.8%. After this fall the yield can rise back

The Dow Jones has come down, keeping our bearish view intact to see a decline toward 43000 initially and then down to 42000-41000. DAX has dipped too but can test support at 20200 and bounce back towards 20500/700 before the expected corrective decline can take place. Nifty has bounced from 24500. Bias is bullish to break 24700 and rise to 25000. Nikkei could be stuck within 39500-39000 for this week while resistance holds at 39500. A break below 39000 is needed for it to fall to 38500-38000. The Shanghai Composite is trading above 3400 just now but needs to sustain and move higher to prevent a decline to 3350.

The Dow (44247.83, -0.35%) has come down further. Our bearish view of seeing a fall to 43000 first and then 42000-41000 remains intact.

DAX (20329.16, -0.08%) remains lower but can get support at 20200. Near-term view is positive for a rise to 20500-20700 or even 21000. But thereafter a corrective fall to 20000 and lower is possible. So, be cautious as the DAX goes above 20500.

Nifty (24610.05, -0.04%) tested 24500 as expected and then has risen back. Bias is bullish to break 24700 and rise to 25000. Outlook is bullish while above 24400.

Nikkei (39204.04, -0.42%) tested 39391.39 before coming off from there. The index is falling while immediate resistance at 39500 seems to hold well. A decisive break below 39000 is essential to confirm further downside toward 38500–38000. Till then a very narrow range of 39500-39000 can hold for the very near term.

Shanghai (3434.38, +0.34%) is showing a slight recovery after the sharp decline seen yesterday. It needs to sustain above 3400 to rise again towards 3500 or higher. Failure to hold above 3400 will trigger a further decline towards 3350. Watch price action around 3400 for now.

Crude prices have risen slightly and look ranged between 73-71 (Brent) and 60-67 (WTI) for the near term. Metal prices also continue their uptrend and can target 2700-2750 (Gold), 33.5-34.0 (Silver) and 4.35-4.40 (Copper) respectively. Natural Gas remains weaker, but the bias is bullish towards 3.4-3.6 while above 3.1.

Brent ($ 72.50) is trading below 73 and could be ranged between 73-71 for now while WTI ($ 68.90) is holding just below 69 and can trade within a range of 69-67 for the near term until a breakout on either side takes place.

Gold ($ 2732.40) broke above 2700 and can rise further towards 2750-2770 in the upcoming weeks.

Silver (32.79) tested a high of 32.80 yesterday. It can rally towards 33.5-34.0 in the near term.

Copper (4.2935) has moved up further and can target 4.35-4.40 soon.

Natural Gas (3.1870) fell sharply to 3.06 before bouncing back from there to close at 3.16 yesterday. Although it is attempting to break below 3.1, failure to decline will keep our bullish view intact for a rise towards 3.4-3.6. Alternatively, on a successful break below 3.1 it can decline further towards 2.8-2.6.

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

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

14:45 20:15 BOC Meeting
… Exp – … Expected 3.25% … Previous 3.75%

DATA ON YESTERDAY:-
—————
3:30 09:00 RBA Meeting
… Exp – … Expected 4.35% … Previous 4.35% …Actual 4.35%