Commission President Ursula von der Leyen’s announcement of a €650 billion defence fund. Asa result, Dollar Index slipped to the support near 105.50 region. The Index could still be vulnerable to fall towards 104.50 if it fails to sustain above 105.50 region. Euro has surged significantly past 1.0550 and a confirmed break past 1.0650 can take it higher towards 107 or even 108 on the upside. EURINR has risen past 92 and can soon test 93 on the upside. USDJPY and EURJPY can remain ranged within 148-152 156-160/61 region respectively for now. AUDUSD looks stable above 0.62 but could face the resistance at 0.63 soon. Pound is likely to test 1.28 soon. Thereafter, whether the rise extends further or not will have to be seen. USDNCY above 7.24, can attempt to rise back towards 7.28 in the near term. USDINR is stuck between 87.50-87.25 region. US ADP Employment data release scheduled today.

Dollar Index (105.72) extended the fall to the mentioned support near 105.50 region before recovering a bit from there. Still a further rise above current levels will be needed, else any break below 105.50 can drag it further towards 104.50 in the near term.

EURUSD (1.0606) shot up significantly past 1.0550 after the European Commission President Ursula von der Leyen’s announcement of a €650 billion defence fund. Now, a confirmed break past 1.065 can bring the 1.07 or even 1.08 into picture. Failure to sustain above current levels, can bring it back towards 1.0550.

EURINR (92.5909) gave a break past the upper end of its range of 90.50-92.00 and if sustained, can head towards 93 soon. Thereafter, a confirmed break past 93 will be needed to extend the rally towards 94. Whether it will happen or not will have to see.

EURJPY (159.01) had initially slipped below 156 to the low of 155.59 but later rose significantly to the high of 159.54. There is further room in the charts to test 160-161 on the upside. Overall, a range of 156-160/61 can hold until decisive break is seen.

Dollar-Yen (149.95) yesterday observed the low of 148.09 before recovering from there. For now, the range of 148-152 is holding well and can persist in the near term. Only a decisive break below 148 is seen, can open the doors for 145.

USDCNY (7.2693) witnessed a sharp fall to 7.2567. Still, while the interim support at 7.24 and deeper support at 7.225 holds, it can attempt to rise back towards 7.28 or even higher in the coming sessions.

Aussie (0.6235) initially slipped below 0.62 but could not sustain and started rising back from the low of 0.6187 itself. An immediate resistance is coming at 0.63, break past which will be needed to rise further. Until then, it can move within 0.62-0.63 region.

Pound (1.2771) can soon teste our target of 1.28 on the upside. Thereafter, a strong break past it will be needed to bring the target of 1.30 or higher into picture. Watch price action closely around 1.28.

USDINR (87.3090) is stuck within the 87.50-87.25 region. A decisive break on the either side will be needed for further directional clarity. For now, downside is anticipated to be limited to 87.00. A rise past 87.50 would be needed to move higher towards 87.80-88.00.

The US Treasury yields have risen back sharply. Resistances are ahead which will have to be broken decisively in order to negate our view of seeing a fall. We will have to wait and see if they are getting a strong follow-through rise from here or not. The German yields sustain higher. View remains bullish and they can rise more. The ECB meeting outcome tomorrow will be important to watch. Market expects a 25-bps rate cut and will be looking to see what their future policy path is. The 10Yr GoI is moving up in line with our expectation and keeps intact our bullish view.

The US 10Yr (4.26%) and 30Yr (4.55%) Treasury yields have risen back sharply. 4.3% (10Yr) and 4.6% (30Yr) are crucial levels. A rise above it will negate the fall to 4% (10Yr) and 4.3% (30Yr) that we have been expecting.

The German 10Yr (2.49%) and the 30Yr (2.84%) yields remain higher. The bullish view is intact. They can rise to 2.6% (10Yr) and 2.9%-3% (30Yr).

The 10Yr GoI (6.7447%) continues to move up. Bullish view is intact to see 6.8%-6.85% on the upside.

As a reaction to Canada and China’s latest tariffs on the US, the Dow Jones fell below 43000 and is likely to extend the losses to 42000-41800. DAX failed to sustain above 23000 and has sharply fallen below 22400. A break below 22000 would lead to further fall losses to 21700 and negate our bullish view to 23500. Nifty is holding at 22000 but remains vulnerable to witness a break below it and fall to 21700 and needs to rise past 22500 to mitigate the downside. Nikkei remains stable above 37000, but the bias remains negative for the index towards 36000-35000. Shanghai is oscillating near 3320. A rise towards 3350-3380 can be seen.

The Dow (42520.99, -1.55%) has declined, breaking below 43000 as expected. That keeps intact our bearish view of seeing a fall to 42000-41800. The price action thereafter will need a close watch.

DAX (22326.81, -3.54%) has tumbled failing to sustain above 23000. A break below 22200 will be bearish to see 21700 on the downside. That in turn will negate the rise to 23500 mentioned yesterday.

Nifty (22082.65, -0.17%) continues to sustain above 22000. But as mentioned yesterday, a strong rise above 22500 is needed to ease the downside pressure. Only then the fall to 21700-21500 will get negated.

Nikkei (37356.39, +0.07%) remains stable above 37000. While below 38000, the outlook remains bearish towards 36000-35000.

Shanghai (3324.4204, +0.01%) trades near 3320. A rise from here would take the index higher to 3350-3380. Else, a fall towards 3300-3280 can be seen.

Crude oil prices continue to fall and may test $ 68 (Brent) and $ 65 (WTI) respectively in the near term. Gold, Silver, and Natural Gas look bullish, with potential targets at $ 2950-$ 3000, $ 33.0-$ 33.5, and $ 4.6-$ 4.7 respectively in the coming weeks. Copper remains within a range of $ 4.7-$ 4.5 for some time.

Brent ($ 70.80) and WTI ($ 67.73) are in line with our expectations, having tested lows of $ 66.77 and $ 69.75 yesterday. A further decline towards $ 68 and $ 65 respectively seems likely in the near term.

Gold ($ 2920.80) is gradually inching up and could rise further towards the $ 2950-$ 2970-$ 3000 levels in the coming weeks.

Silver ($ 32.45) has risen as expected and could move higher towards $ 33.0-$ 33.5 in the near term.

Copper ($ 4.5690) is expected to trade within the previously mentioned range of $ 4.7-$ 4.5 for some time.

Natural Gas ($ 4.3170) has reached a high of $ 4.55 before closing lower at $ 4.35 yesterday. While above $ 4.2, it may test $ 4.6-$ 4.7 on the upside.

22:30 04:00 AU PMI
… Exp – … Expected – … Previous -22.7

0:30 06:00 AU GDP
… Exp – … Expected 0.5% … Previous 0.3%

5:00 10:30 IN Services PMI
… Exp 60.8 … Expected 61.1 … Previous 56.5

7:30 13:00 CH CPI
… Exp -0.7 … Expected 0.5 … Previous 0.4

9:00 14:30 EU Composite PMI
… Exp – … Expected – … Previous 50.2

13:15 18:45 US ADP Emp
… Exp – … Expected 144K … Previous 183K

DATA YESTERDAY
—————
23:30 05:00 JP Unemp
… Exp 2.4% … Expected 2.4% … Previous 2.4%

10:00 15:30 EU Unemp
… Exp 6.3% … Expected 6.3% … Previous 6.2% … Actual 6.2%