The major currencies witnessed sharp movements yesterday due to a significant rise in the Euro post stronger PMI release. The Dollar Index slipped to the low of 107.75 but has risen past 108 again. While above 108, targets of 110-111 remains intact in the near term. Euro has an upside capped at 1.0450 for now. Only a sustained rise past 1.0500 can negate the bearish outlook on it. EURINR can trade sideways between 88-89/90 for the near term. USDJPY has risen past 158 and if sustained, can head towards 160 or higher in the coming sessions. Pound and EURJPY have immediate resistances coming at 1.26 and 165 respectively, a strong break past which can take both higher in the near term. USDCNY can gradually head towards 7.35. USDINR had declined a bit on the NDF yesterday but we expect the downside to be limited to 85.70/65 and our target of 86 remains intact for now. Watch out for the US Trade Balance scheduled today.

Dollar Index (108.896) had declined a bit on Friday but while above 108.00-108.50, it has the scope to test the resistance coming at 110-111 in the near term before possibly getting topped out. Only a break below 108 if seen, can delay the targets.

EURUSD (1.0312) has recovered well from the low of 1.0223 but could face rejection from the 1.0350-1.0400 region. If the pair again slips below 1.03, it can trigger a fall to 1.02 or even 1.01-1.00 in the near term on a confirmed break below 1.02.

EURINR (88.4508) is holding well above the support of 88 and if sustained, can rise towards 88.50-89.00 in the coming sessions. Overall, a narrow range of 88-89 and a broad range of 88-90 can hold in the near term.

Dollar-Yen (157.73) needs to break past 158 to head towards 160 or higher in the coming sessions. Until then, a narrow range of 156-158 can hold for some time. Overall, the downside is expected to be limited to 156-155. Watch price action closely around 158.

EURJPY (162.69) has risen past 162 again. Now if the rise sustains, it can get extended towards 164-165 again in the coming sessions. Only a decisive break below 162 if seen, can make it bearish towards 160-158/56. For now, the view remains bullish above 162.

USDCNY (7.3265) has finally risen past 7.30 and can head towards 7.35 in the near term. Looking from the broader picture, it has a scope to rise towards 7.40 but a confirmed break past 7.35 will be needed for that. Overall, the view is bullish for now.

Aussie (0.6231) is attempting to rise back but the upside looks capped at 0.6250-0.6300. Any decisive break below 0.62 if seen can indicate medium-term bearishness for the pair with an initial target of 0.61-0.60. Only a sustained rise past 0.63 can negate the bearish view.

Pound (1.2439) was expected to fall towards 1.22 or even 1.20 while below 1.24. Instead, it rose from the low of 1.2363 itself. Currently, it is back above 1.24 but resistance is coming between 1.25-1.26 region, thereby suggesting limited upside for the pair. While below 1.26, fall to 1.22 cannot be ruled out.

USDINR (85.7270) can test 86 within the current week itself on a confirmed break past 85.80. Overall, the downside could be limited to 85.70/65 and gradually it can rise higher in the coming sessions.

The US Treasury yields remain higher and stable. View remains bullish and the yields can rise further going forward. The German yields are inching higher. A strong follow-through rise from here is needed to see an extended rise. Else there is a danger of falling back. The 10Yr GoI has declined sharply. View is bearish. More fall is on the cards.

The US 10Yr (4.62%) and 30Yr (4.84%) remains higher but stable. View remains bullish for a rise to 4.8% (10Yr) and 5% (30Yr) while above the support at 4.5%-4.45% (10Yr) and 4.7%-4.65% (30Yr).

The German 10Yr (2.44%) and the 30Yr (2.66%) yields are inching up. A strong follow-through rise from here is needed for an extended rise to 2.6% (10Yr) and 2.8% (30Yr). A fall below 2.4% (10Yr) and 2.6% (30Yr) can drag them down to 2.2% (10Yr) and 2.4% (30Yr). We will have to wait and watch.

The 10Yr GoI (6.7483%) has declined sharply. Our bearish view is intact to see 6.7%-6.65% on the downside.

The Dow Jones failed to sustain above 43000 and while below 43000-43500, the index could target a decline toward 42000-41800 in the near term. DAX has risen above 20200, and a follow-through rise could push the index higher toward 20500-20700, negating our earlier expectation of a fall to 19600/500. Nifty took a hit and fell to 23600 after two cases of HMVP were reported. It could fall further to 23500-23000 if follow-through selling is seen today. Nikkei surged above 40200 following reports that the US President may adopt less aggressive tariffs. If these gains are sustained, the index could target 41000-42000. Shanghai remains stable, hovering around 3200. While below 3250, it could decline further to 3150.

The Dow (42706.56, -0.06%) failed to sustain the break above 43000. That keeps it vulnerable for a fall to 42000-41800 and even 41500 going forward.

DAX (20216.19, +1.56%) has risen and closed above 20200. A further rise from here will negate the fall to 19600-19500 that we were expecting. It can then clear the way for testing 20700 on the upside.

Nifty (23616.05, -1.62%) has declined sharply on HMPV virus concerns. A fall below 23500 can drag it down to 23000. We will have to wait and see if there is a follow-through selling today or not. While above 23500, a sideways range of 23500-24100 can remain intact for some more time.

Nikkei (40264.45, +2.44%) surged above 40200. As long as this momentum sustains, the index could target 41000-42000.

Shanghai (3201.4001, -0.19%) trades near 3200. While below 3250, the index remains vulnerable toward the support at 3150. A decisive break above 3250 is necessary to confirm a move higher.

Crude ane Copper prices have tested their immediate resistance levels. While these levels holds, a fall towards 73-73 (Brent), 71-70 (WTI) and 4.10-4.00 (Copper) respectively can take place in the near term. Gold, Silver and Natural Gas remain bullish and can target 2700-2750, 31.0-31.5 and 3.8-4.0 respectively on the higher side.

Brent ($ 75.09) tested a high of 77.50 but has fallen back from there. It can fall towards 73-72 while below 77.50/78.00.

WTI ($ 73.23) has tested immediate resistance at 75 yesterday and has fallen back from there. While the resistance holds, it can a further fall towards 71-70.

Gold ($ 2650.20) has dipped slightly but can rise gradually towards our mentioned levels of 2700-2750 in the upcoming sessions.

Silver (30.56) surged to a high of 30.96 yesterday before closing slightly lower. It can target 31.0-31.5 in the upcoming weeks.

Copper (4.1570) has surged to test the immediate resistance at 4.20 yesterday. From there the price has fallen back to 4.15 and while the resistance holds, a further decline towards 4.10-4.00 looks likely for the near term. Overall a range of 4.20-4.00 can hold for some time.

Natural Gas (3.6950) has risen in line with our expectations to 3.7260 yesterday. Our view remains intact to see a rise towards 3.8-4.0 in the near term.

7:30 13:00 CH CPI
… Exp – … Expected -0.1 … Previous 0.7

10:00 15:30 EU Unemp
… Exp 6.5% … Expected 6.3% … Previous 6.3%

13:30 19:00 US Trade Balance
… Exp -83.5 … Expected -78.4 … Previous -73.8

DATA YESTERDAY:
————-
5:00 10:30 IN Services PMI
… Exp 58.5 … Expected 60.8 … Previous 58.4 …Actal 59.3