The Dollar Index remains volatile ahead of the FOMC, ECB and the Tariffs speculations. At the moment index appears uncertain on whether it will head towards 109 and higher or it will test deeper support around 106.00-105.50. The Euro have fallen a bit but above 1.04, it can attempt to rise back. Only a break below 1.04 can be bearish for pair. EURINR needs to rise past 91 to maintain the bullishness, else any break below 90 can drag it further to 89. USDJPY is back within 155-157 range. AUDUSD and Pound can trade within 0.63-0.62 and 1.226-1.24 region for a while. USDCNY looks stable above 7.25 and can test 7.28/29 if the current rise sustains. USDINR is trading within 86.20-86.60 region but it can slowly descend towards 86.00-85.90 in the coming weeks. The US Durable Goods Orders, US Case Schiller and US Consumer Confidence data releases are scheduled today.

Dollar Index (107.89) witnessed an initial fall to 106.96 yesterday before rising back from there. Stronger New Home Sales data release at 698k and the tariffs speculations supported the rise. Right now, the view appears a bit uncertain on whether the rise will extend further to 109 and higher or whether it will range within 106.00-1.0550 region in the medium term. The index can remain volatile ahead of the FOMC and ECB scheduled tomorrow and the day after.

EURUSD (1.0431) witnessed a high of 1.0533 before coming down. While the pair sustains above 1.04, it can again attempt to rise back towards previous levels. Only a break below 1.04 if seen, can bring back the lower levels of 1.0350-1.0300 into the picture.

EURJPY (162.31) continues to remain volatile within the range of 164-160. A decisive break on either side will be needed for further directional clarity.

Dollar-Yen (155.64) extended the fall to the low of 153.71 yesterday before recovering from there. Currently, the pair is back within its 155-157 range. It will either have to sustain below 155 or rise past 157 to get further clarity.

USDCNY (7.2502) rose to the level of 7.2667 before closing lower. While above 7.250-2.225, a rise back towards 7.28/29 can be seen in the near term.

Aussie (0.6258) is back within its range of 0.63-0.62 and unless a break past 0.63 is seen, the range can persist for a while. Pound (1.2448) tested the high of 1.2523 before moving lower. A strong break past 1.26 will be needed to turn bullish again, else for now it can oscillate within 1.26-1.24 region. Any break below 1.24 if seen, can open the doors for 1.22 on the downside.

USDINR (86.4670) is trading within the immediate range of 86.20-86.60 for now. On a confirmed break below 86.20, pair can descend towards 86.00-85.90 in the coming weeks.

The US Treasury and the German yields continue to fall in line with our expectation. Both the yields have room to fall more from here before reversing higher again. The US Fed meetingon Wednesday and the ECB meeting on Thursday are key events to watch this week. The 10Yr tested its support and has bounced as expected. While the support holds, the yield can rise in the coming days.

The US 10Yr (4.55%) and 30Yr (4.78%) yields are coming down towards 4.5%-4.4% (10Yr) and 4.7%-4.6% (30Yr) as expected. After this fall the uptrend can resume and target 5% (10Yr) and 5.2% (30Yr) over the medium-term.

The German 10Yr (2.53%) and the 30Yr (2.75%) yields continue to come down. Our view of seeing fall to 2.4% (10Yr) and 2.6% (30Yr) remains intact. Resistance at 2.6% (10Yr) and 2.8% (30Yr) can cap the upside for now.

The 10Yr GoI (6.68%) yield fell to a low of 6.6465% and then has bounced. We expect the yield to sustain above 6.65%. A rise above 6.7% from here can take the yield up to 6.8%-6.85% again in the coming weeks.

The Dow Jones dipped to 44000 initially but quickly recovered, signaling bullish momentum and keeping the view for a rise to 45100 intact. DAX saw a slight decline; however, while above 21000, the bias remains positive for a potential rise towards 21500-21900. Nifty has broken below 23000, falling to 22800. It could extend its decline toward the key support level of 22500 before attempting a reversal. Nikkei has fallen below 39500 and is now heading towards 39000-38000. Shanghai struggled to rise past 3270 and appears to lack strength. The index is likely to hold within the 3200-3300 range in the near term.

Dow (44713.58, +0.65%) has risen back sharply from a low of 44026. That keeps intact our bullish view of seeing 45100—the upper end of the 41850-45100 range.

DAX (21282.18, -0.53%) remains lower and can test 21000. It has to hold above 21000 to keep the chances alive to see 21500-21900. A break below 21000 can drag it down to 20500-20000. We will have to wait and watch.

Nifty (22829, -1.14%) broke 23000 and fell to 22800 as expected. 22500 can be tested. We reiterate that 22500 is a strong long-term support from where a reversal is possible. So, it is time now to start looking at the market from the buy side. 22000 can be the maximum downside in a worst-case scenario.

Nikkei (39340.10, -0.57%) extended its fall below 39500 and is expected to remain within the range, declining further towards 39000-38000.

Shanghai (3250.6007, -0.06%) trades near 3250. Broadly, the index is expected to hold the range of 3200-3300. Within this range, a break below 3250 would lead to a fall towards 3200.

Crude prices have plunged due to the concerns of weaker Chinese stimulus. While the respective support levels hold, a bounce back towards 79-81 (Brent) and 75-77 (WTI) can take place in near term. Gold remains biased for a rise towards 2800-2850 while Silver can range between 30-31. Copper and Natural Gas look bearish towards 4.1 and 3.0-2.8 .

Brent ($ 77.25) and
WTI ($ 73.36) have fallen sharply to test their respective support levels due to concerns of weaker Chinese stimulus. While the support holds, the prices can bounce back towards 79-81 and 75-77 respectively in the near term.

Gold ($ 2745.90) has reverted back to a low of 2738 yesterday due to stronger Dollar. While it sustains above 2700 we retain our view of seeing a rise to 2800-2850 in the upcoming weeks.

Silver (30.52) fell to a low of 30.04 as expected. While the immediate support holds, a range of 30-31 can hold for some time.

Copper (4.2640) has fallen to 4.22 in line with our expectations. It can fall to its immediate support at 4.1 in the upcoming weeks. Thereafter while the support holds a range of 4.1-4.4 can hold for the medium term.

Natural Gas (3.2390) has plunged below 3.5 due to the forecast of warmer US temperature, contrary to our expectations. While it sustains below 3.5, a further fall towards 3.0-2.8 looks likely for the near term.

13:30 19:00 US Durable Goods Order
… Exp -0.8% … Expected 0.1% … Previous -1.1%

14:00 19:30 US Case Schiller
… Exp – … Expected 4.2% … Previous 4.2%

15:00 20:30 US Cons Conf
.. Exp 101 … Expected 106 … Previous 105

DATA YESTERDAY
—————
9:00 14:30 GER IFO Bus Climate
… Exp 84.5 … Expected 84.6 … Previous 84.7 … Actual 85.1

9:00 14:30 GER IFO Bus Situations
… Exp 84.1 … Expected 85.4 … Previous 85.1 … Actual 86.1

9:00 14:30 GER IFO Bus Expectation
… Expn 83.8 … Expected 84.0 … Previous 84.4 … Actual 84.2

15:00 20:30 US New Home Sales
… Exp 695K … Expected 669K … Previous 674K … Actual 698K