The Dollar Index is rising as expected and overall our view remains bullish towards 110-111 in the near term. Euro has upside capped at 1.0450 and a confirmed break below 1.03 can drag the pair to 1.02 or even 1.00 in the medium term. EURINR and AUDUSD need to see a decisive break on either side of their respective ranges of 90-88 and 0.63-0.62 for further directional clarity. USDJPY, on a sustained rise past 158.50 can head towards 160 or higher in the coming sessions. Pound is coming off as expected and can soon test 1.22 on the downside. EURJPY is stuck between 165 and 163. USDCNY can gradually head towards 7.35. USDINR has risen past 85.80 and while the rise sustains, a test to 86 can happen in the near term.

A report saying that Trump is considering declaring a national economic emergency to obtain legal justification to slap large tariffs on US allies and adversaries led to a sharp rise in the Dollar Index (109.002) to 109.37 and a decline in the EURUSD (1.0316) to 1.0273 but both reversed back within a short time. While Dollar Index remains bullish towards 110-111, Euro can fall towards 1.02 while below 1.0450 and on a confirmed break below 1.03.

EURINR (88.6176) has been coming off since the last 2-3 sessions but has managed to hold above 88 for now. A decisive break on either side of its range of 90-88 is needed for further directional clarity. If EURUSD breaks below 1.03, then the cross can be vulnerable to fall below 88 as well.

Dollar-Yen (158.07) tested 158.55 on Dollar strength. The pair will have to rise strongly above 158.50 to test 160-162 in the coming sessions. Else, it can again fall back within its range of 156-158.

EURJPY (163.07) is stuck in the 165-163 region. A rise past 165 will be needed to reach 167 or even 170 in the medium term. At the same time any break below 163 if seen, can drag the pair to 162-160. Watch price action closely around current levels.

USDCNY (7.3309) is slowly inching up towards our target of 7.35. Note that the charts have enough room to see a rise to 7.40 but a confirmed break past 7.35 will be needed for that. Overall, the view is bullish for now.

Aussie (0.6203) is currently back within its narrow range of 0.63-0.62, after testing the low of 0.6187. A decisive break below 0.62 can indicate medium-term bearishness for the pair with an initial target of 0.61-0.60. Until then, the range can persist.

Pound (1.2359) is coming off as expected and can soon test 1.22 on the downside. Thereafter, whether the fall extends further to 1.20 or not will have to be seen. Overall, the view remains bearish below 1.26.

USDINR (85.8990) finally rose past 85.80 yesterday. Now while the rise sustains, a test to 86 can happen soon in the near term.

The US Treasury yields remain higher. View is bullish. The yields can rise more from here. The US non-farm payroll (NFP) and the unemployment data release tomorrow will be important to watch. The German Yields are moving up in line with our expectation. Bullish view is intact. The 10Yr GoI has risen back. But resistance is ahead which has to be broken to negate the fall that we have been expecting. For now, the near-term outlook is negative.

The US 10Yr (4.67%) and 30Yr (4.92%) yields remain higher but stable. Bullish view is intact to see 4.8% (10Yr) and 5% (30Yr) on the upside.

The German 10Yr (2.54%) and the 30Yr (2.76%) yields are heading up towards 2.6% (10Yr) and 2.8% (30Yr). The price action thereafter will need a watch to see if a reversal is happening or not.

The 10Yr GoI (6.7678%) has risen back. While below 6.8%, the downside is open to test 6.7%-6.65%. A strong rise above 6.8% is needed to negate this fall.

The Dow Jones has seen a slight rise but remains bearish as long as it stays below 43000, with a potential decline toward 42000-41800. DAX rose to 20480 during the session but gave up its intraday gains and closed flat. The index remains bullish toward 20700 as long as it sustains above 20200. Nifty is holding above the key support of 23500, maintaining the sideways range of 23500-24100. Nikkei continues to slip and remains below 40000. The index is expected to stay within the range of 38000-40000 unless it rises decisively past 40000 to target 41000-42000. Shanghai is holding below 3250 and could fall further toward 3150 if it breaks below 3200. A strong move above 3250 is needed to reverse the bearish outlook.

The Dow (42635.20, +0.25%) has bounced. It remains stable and range bound below 43000. Downside is open to test 42000-41800 and lower while it remains below 43000-43500.
DAX (20329.94, -0.05%) has come off from the high of 20480 but can get support at 20200. While above 20200, the bias remains bullish to see 20700 on the upside.

Nifty (23688.95, -0.08%) has risen back well after testing 23500. That keeps intact the 23500-24100 range. Need to see if it is getting a follow-through rise from here today. 23800 is an intermediate resistance within the range.

Nikkei (39942.90, -0.35%) has fallen further toward 39600. As long as it remains below 40000, the index is likely to hold the range of 38000-40000. A sustained break above 40000 is essential to target 41000-42000.

Shanghai (3212.0764, -0.56%) continues to trade below 3250, leaving it vulnerable to a decline toward the support at 3150 if it confirms a break below 3200. A decisive move above 3250 is required to signal a potential upward reversal.

Crude prices have reversed from their respective resistance levels and appear bearish, with a decline expected towards 75-74 (Brent) and 72-71 (WTI). The outlook for Gold and Silver is mixed, but the bias leans towards a rise to 2700-2750 and 31.5-32.0, respectively. Copper and Natural Gas appear bullish, targeting 4.3-4.4 and 3.8-4.0, respectively.

Brent ($ 75.75) tested a high of 77.89 as expected, before falling back to 76.04. With the immediate resistance intact, a further decline towards 75-74 seems likely in the near term.

WTI ($ 72.91) tested a high of 75.29 yesterday in line with our expectations and fell back to 73.16. It is expected to decline further towards 72-71 in the upcoming sessions.

Gold ($ 2676.40) is trading sideways, holding the support near 2650. As long as this support holds, a rise towards the earlier mentioned levels of 2700-2750 is likely.

Silver (30.73) tested a high of 31.05 yesterday. A sustained break above this level is needed to see a further rise towards 31.5-32.0; otherwise, it may fall back to 30.0-29.5. Our preferred view remains to see a rise towards 31.5-32.0.

Copper (4.2765) broke above 4.2 and surged to 4.2730 yesterday after the release of weaker-than-expected US ADP employment data. While above 4.2, our outlook is bullish towards 4.3-4.4 in the near term.

Natural Gas (3.6340) has bounced back sharply to 3.6940 as anticipated. A further rise towards 3.8-4.0 is expected in the near term.

0:30 06:00 Australia Trade Balance
… Exp – … Expected 5.6 … Previous 6.0

10:00 15:30 EU Retail Sales
… Exp 0.0% … Expected 0.3% … Previous -0.5%

DATA YESTERDAY:
————-
13:15 18:45 US ADP Emp
… Exp – … Expected 131K … Previous 146K … Actual 122K