Christine Lagarde, President of the European Central Bank (ECB) stated that economic growth could fall by half a percentage if the tariffs were imposed and retaliated against. This led Dollar Index to initially rise past 104 before coming down. The lower targets of 103-102 are kept open in Dollar Index, while it trades below 104. The Euro can trade within 1.080-1.095 region for a while. EURINR has immediate support near 93.50, above which it can rise back towards 95. USDJPY, USDCNY, AUDUSD & Pound can trade within respective ranges of 148-150, 7.22-7.26, 0.64-0.62 and 1.30-1.29 in the near term. EURJPY above 160, can attempt to rise back towards 164. USDINR below 86.50, can be vulnerable to fall towards 86.00.

Stronger US Philifed Index, US Current Account & US Existing Home Sales data releases and the ECB’s statement of weaker growth led Dollar Index (103.819) to rise to the high of 104.13. Now, a sustained rise past 104 will be needed to head towards 105. Else while below it, a fall to 103-102 can happen before eventually bouncing back higher.

EURUSD (1.0845) observed a fall to the level of 1.0815 after Christine Lagarde, President of the European Central Bank (ECB), cautioned about potential weaker growth due to tariffs. While the pair sustains above 1.08, a near term range of 1.080-1.095 can hold for a while. The pair will have to decisively break below 1.08 to assume that it peaked at 1.0954. The targets of 1.10/11 are kept open for now.

EURINR (93.6013) slipped below 94 to the low of 93.42. An immediate support is coming near 93.50, while it holds the cross can bounce back higher towards 95. Only a break below 93 can drag it to 92. The target of 97 seems to be eliminated for now.

EURJPY (161.60) is coming off as anticipated and it even tested the low of 160.79. While the cross holds above 160, it can attempt to rise back towards 164. Only a break below 160 can turn the cross bearish in the near term.

Dollar-Yen (149.06) has immediate resistance at 150, below which a narrow range of 150-148 and broad range of 150-146 can hold for now.

USDCNY (7.2476) has bounced well from the support near 7.225. The pair can rise higher within its broad range of 7.22-7.26. Thereafter, a decisive break above the range will be needed to rise towards 7.28.

Aussie (0.6292) and Pound (1.2957) can hold the range of 0.64-0.62 and 1.30-1.29 respectively until a decisive break is seen on the either side of it. A strong rise past 1.30 in Pound can take it higher at 1.35.

USDINR (86.2640) in line with our bearish view yesterday observed the low of 86.1950 before closing higher. On the NDF the spot continues to trade lower and while below 86.50, the pair can be vulnerable to test 86.00 as well.

The US Treasury yields remain lower. The view is bearish to see more fall. The German yields have dipped further. They are on a corrective fall now. But supports are there to limit the downside and keep the broader uptrend intact. The 10Yr GoI is coming down in line with our expectation and is keeping intact our bearish view.

The US 10Yr (4.24%) and 30Yr (4.56%) Treasury yields remain lower. The view is bearish while below 4.35% (10Yr) and 4.65% (30Yr). The yields can fall to 4.1%-4% (10Yr) and 4.4%-4.3% (30Yr).

The German 10Yr (2.78%) and the 30Yr (3.09%) yields have dipped further. Support at 2.7% (10Yr) and 3% (30Yr) can limit the downside and keep the broader uptrend intact. We expect the yields to rise to 3% (10Yr) and 3.3%-3.4% (30Yr) eventually.

The 10Yr GoI (6.6366%) is coming down towards 6.6% in line with our expectation. After this fall, the yield can rise back to 6.7%-6.75%.

The Dow Jones closed flat, and while below 42100, the outlook remains bearish towards 40000-39000. DAX has fallen below 23000, and is expected to hold the range of 22000-23500 and possibly witnessing a fall within this range. Nifty has risen above 23100, Further, rise towards 23500 looks possible. Nikkei heading towards testing the mark of 38000. Shanghai has risen from a low of 3401 and is attempting a rise towards 3430-3450.

The Dow (41953.32, -0.03%) rose to a high of 42250 and has come down from there. While below 42100 the view is bearish to see a fall to 40000-39000 in the coming weeks.

DAX (22999.15, -1.24%) has declined sharply. That keeps intact the 22200-23500 range. The index can now fall within this range.

Nifty (23190.65, +1.24%) continues to move up and has risen above 23100. While above 23100, a further rise to 23500 – a crucial resistance, is possible.

Nikkei (37903.57, +0.40%) remains below 38000 and trying to rise past 38000. Watch price action near 38000 to see whether it rise past 38000 or fall towards 37000.

Shanghai (3412.6841, +0.11%) has bounced from a intra-day low of 3401 and is attempting a rise towards 3430-3450. Support near 3400-3380 can be seen.

Brent and WTI have risen as expected and may remain within their previous mentioned ranges for some time. Gold, Silver and Copper faces near term resistance which needs to be broken to move higher in the coming weeks, else remains vulnerable for a fall. Natural gas has dropped below $ 4.00 and may decline further, but a rebound above could revive our earlier bullish outlook.

Brent ($ 72.19) and WTI ($ 68.31) have risen in line with our expectations. It remains to be seen whether they can move further up or stay within the previously mentioned ranges of $ 72-$ 68 and $ 69-$ 65, respectively, for some time.

Gold ($ 3,043.30) remains below its crucial resistance level, which must be broken to advance towards $ 3,100-$ 3,200. Otherwise, while the resistance holds, a decline towards $ 3,000-$ 2,950 cannot be ruled out.

Silver ($ 33.90) has fallen back as expected. The 8-day moving average support is near $ 33.70, which could hold and push the price back to $ 34.0-$ 34.5. However, a break below this level could lead to a further drop towards $ 33.00.

Copper ($ 5.1250) is holding steady in the near term. While below its immediate resistance, a decline towards $ 5.00-$ 4.90 looks likely. However, if it breaks higher, it could move up towards $ 5.20-$ 5.25.

Natural Gas ($ 3.8760) has fallen sharply, breaking below its immediate support, contrary to our expectations. While below $ 4.00, a further decline towards $ 3.70-$ 3.60 is possible in the near term. Alternatively, a rebound above $ 4.00 would keep our earlier view of a rise to $ 4.40 intact.

23:01 04:31 UK Cons Conf
… Exp -18 … Expected -21 … Previous -20

23:30 05:00 JP CPI
… Exp 4.3 … Expected 2.9 … Previous 4.0

DATA YESTERDAY
—————
0:30 06:00 Australia Labour Force
… Exp – … Expected 31.4K … Previous 17.7K …Actual 15.2K

6:00 11:30 UK Unemp
… Exp 4.4% … Expected 4.4% … Previous 4.4% …Actual 4.4%

7:30 13:00 SNB Mtg
… Exp – … Expected 0.25% … Previous 0.50% …Actual 0.25%

11:00 16:30 BOE Mtg
… Exp – … Expected 4.50% … Previous 4.50% …Actual 4.50%

11:00 16:30 UK BOE Minutes
… Exp – … Expected 0-2-7 … Previous 0-9-0 …Actual 0-1-8

12:30 18:00 US Philifed Index
… Exp 16.8 … Expected 9.4 … Previous 18.1 … Actual 12.5

12:30 18:00 US Current Account Balance
… Exp – … Expected -331.0 … Previous -310.3 … Actual – 303.9

14:00 19:30 US Existing Home Sales
… Exp 4215K … Expected 3940K … Previous 4090K …Actual 4260K