The Higher US NFP and lower US Unemployment data on Friday led to significant strength in the Dollar. As a result, the Dollar Index rose to the high of 109.966 and has a scope to test 111 on the upside before getting topped out. The Euro on the other hand slipped below 1.03 and can fall further towards 1.02-1.01 in the near term. EURINR needs to see a decisive break on either side of its range of 90-88 for further directional clarity. USDJPY is back within its earlier range of 158-156. AUDUSD, Pound and EURJPY appear bearish towards 0.61-0.60, 1.20 and 160 respectively in the near term. USDCNY can gradually head towards 7.35. USDINR has moved in line with our bullish view. For the current week, we expect the rise to extend towards 86.25 and the pair to oscillate within 85.80-86.25 region keeping the current upside momentum intact. Watch out for the IN-CPI data release scheduled today.

Higher than expected US NFP and lower US Unemployment at 256k(150k) and 4.1% (4.2%) respectively led the Dollar Index (109.64) to move sharply to 109.966 and EURUSD (1.0244) to test 1.02128 on the downside on Friday. The Index has further room to test 111 on the upside before getting peaked out. If so, the Euro can fall towards 1.01 in the near term before attempting to rise back.

While EURUSD has slipped below 1.03 again, EURINR (88.1955) is holding well above 88. Immediate upside is capped at 89. A decisive break on either side of its broad range of 90-88 is needed for further directional clarity.

Dollar-Yen (157.55) is back within its earlier range of 158-156, despite the Dollar strength. We are uncertain at the moment on whether the BOJ is preventing Yen from depreciating past 158 or not. For now, the downside can be limited to 156-155 and a sustained rise past 158 can take it higher to 160-162 in the coming sessions.

EURJPY (161.40) is coming off as expected and can soon test 160 on the downside. Thereafter, whether the fall halts at 160 or extends further to 157-156 will have to be seen. Only a rise past 164-165 can negate the expected fall and take it higher to 167 or even 170 in the medium term. Else, the view remains bearish for now.

USDCNY (7.3307) continues to trade flat since the last couple of sessions, thereby delaying our targets. For now, we retain our upside target of 7.35. Thereafter, an extended rise to 7.40 can happen but needs confirmation above 7.35. Overall, the view is bullish for now.

Aussie (0.6157) and Pound (1.2186) witnessed a low of 0.6139 and 1.2190 respectively on Friday in line with our bearish view. Further, if the fall continues, it can extend to 0.61-0.60 and 1.20 in the near term. Overall, the view remains bearish below 0.6250-0.6300 and 1.24/26 respectively.

USDINR (85.97) witnessed a high of 85.9750 in line with our view of testing 86. The overall trend for the pair looks bullish. For the current week, a high of 86.25 can be tested and is anticipated to oscillate within 85.80-86.25 region. On the NDF, the pair has tested 86.15/16 and currently quotes 86.0850 in line with our bullish view. It is to be seen if the pair opens with a gap up above 86 today on the onshore or opens below 86 to gradually move higher during the week.

Strong jobs data has taken the US Treasury yields higher on Friday as expectation for a much slower rate cuts increased after this data release. Both the US Treasury and the German yields are coming closer to a crucial level. Need to see if the yields are going to see an extended rise breaking above this crucial level or reversing lower. The price action in the next few days is going to be very important. The 10Yr GoI is attempting to move up. Resistance is ahead which has to be broken to move strongly higher to negate the fall that we have been expecting.

The US 10Yr (4.76%) and 30Yr (4.95%) yields have risen sharply on Friday. They are about to test 4.8% (10Yr) and 5% (30Yr) in line with our expectation. The price action after this rise will need a close watch to see if the rise is extending beyond 4.8% (10Yr) and 5% (30Yr) or reversing lower.

The German 10Yr (2.59%) and the 30Yr (2.79%) yields have come up to 2.6% (10Yr) and 2.8% (30Yr) in line with our expectation. We will have to wait and watch whether the yields are reversing lower or extending beyond the above-mentioned levels.

The 10Yr GoI (6.7724%) is attempting to move up. A strong rise above 6.8% is needed to negate the fall to 6.7%-6.65% and take the yield up to 6.9%. We will have to wait and watch.

The Dow Jones has fallen below 42000 and is expected to test the support of 41800. Failure to hold the support would drag the index lower to 41500-41300, and if the support holds, we might see a rise towards 42300-42500. DAX lacks the strength to move higher and could come down to 19800. Nifty has remained below 23500 and could come down to 23000-22500. Nikkei is closed today. Shanghai has fallen below 3200 and is holding the support of 3150 as of now. While the support holds, it could rise towards 3250.

The Dow (41938.45, -1.63%) tumbled on Friday and has come into the 42000-41800 region much faster than expected. Failure to sustain above 41800 can drag it down to 41500-41300. While above 41800 holds, a corrective rise to 42300-42500 is a possibility.

DAX (20214.79, -0.50%) seems to be struggling to get a strong follow-through rise. It can fall to 20000-19800 again. As such the expected rise to 20700 may get delayed.

Nifty (23431.50, -0.40%) has declined below 23500 as expected. The outlook is weak now to see 23000. From a long-term picture, 23000-22500 is a strong support from where the Nifty can see a reversal.

Nikkei (39190.18.90, -1.05%) is close today. Within its broader range of 38000-40000, a break below 39000 could lead to a drop toward 38000.

Shanghai (3167.1272, -0.4%) is holding the support of 3150. Going ahead, as long as this support holds, it could witness a rise towards 3250.

Crude and Natural Gas prices surged on Friday after the US imposed new sanctions on Russia’s oil, which could restrict global oil supplies. A further rise towards 82-84 (Brent), 80-82 (WTI), and 4.4-4.6 (Natural Gas) looks likely in the near term. Gold and Silver are facing resistances near their respective levels and appear bearish, with targets of 2680-2650 and 31.0-30.5, respectively. Copper may rise towards its immediate resistance at 4.4 before falling back to 4.2-4.10.

Brent ($ 81.20) and WTI ($ 78.06) surged sharply on Friday to 80.75 and 77.86 after the US increased sanctions on Russian crude oil. As long as the prices sustain above 80 and 78, a further rise towards 82-84 (Brent) and 80-82 (WTI) is expected in the near term.

Gold ($ 2718.50) rose above $ 2700 as expected. Immediate resistance is near $ 2730. If it fails to break above this level, it could fall towards $ 2680/2650 in the near term, ranging between $ 2730-2650 for a while. Only a sustained break above $ 2730 could open the way for higher levels around $ 2800-2850.

Silver ($ 31.30) tested a high of 31.84 on Friday. Immediate resistance is seen at 32.0. While this holds, a decline towards 31.0-30.5 is likely in the near term.

Copper ($ 4.3085) is losing momentum to break above 4.35. Our outlook remains unchanged, with a rise towards 4.4 in the near term before a pullback to 4.20-4.10 is seen.

Natural Gas ($ 4.2460) moved up sharply to 4.01 on Friday after the US imposed new sanctions on Russia’s oil. Today, it has opened higher with a gap up at 4.3470. While it holds above 4.2, it can extend its bullish move towards 4.4-4.6 in the near term.

12:00 17:30 IN CPI
… Exp 5.40 … Expected 5.28 … Previous 5.48

DATA FRIDAY:
————-
12:00 17:30 IN IIP
… Exp 5.3% … Expected 4.0% … Previous 3.7% … Actual 5.2%

13:30 19:00 US NFP
… Exp 142K … Expected 150K … Previous 212K … Actual 256K

13:30 19:00 US Unemployment Rate
… Exp 4.1% … Expected 4.2% … Previous 4.2% … Actual 4.1%

13:30 19:00 US Avg Hrly Earnings
… Exp 0.5 … Expected 0.3 … Previous 0.4 … Actual 0.3

13:30 19:00 US Average Hourly Earnings Production & Non Supervisory Employees
… Exp – … Expected – … Previous 0.3 …Actual 0.3

13:30 19:00 CA Labour Force
… Exp – … Expected 24.5K … Previous 50.5K Actual 90.9K