The tariffs concerns kept the markets volatile yesterday as well. The Dollar Index extended the fall to 101.26 before recovering from there. While the support near 101 holds, the index can rise higher. Euro surged to the level of 1.1146 before cooling down. Immediate resistance is coming at 1.12, below which a fall to 1.10/09 can happen. EURINR tested the resistance at 95 before coming down. While it holds, a fall back towards 93.50 can be witnessed. USDJPY has deeper support at 144, above which it can attempt to rise back towards 146-148 in the near term. EURJPY and AUDUSD continues to remain volatile within its respective broad ranges of 164-160 and 0.64-0.62. The USDCNY has declined a bit but while above 7.26 it can attempt to rise back to target of 7.30. Pound tested 1.3207 before cooling down. Still while above 1.30/29, the pair has fair chance to head towards 1.35. USDINR is coming off as anticipated and can extend the fall to 85.25-85.00. Watch out for the US NFP, US Unemployment & US Avg Hrly Earnings data releases scheduled today.

Dollar Index (101.825) extended the fall to the low of 101.267 as the investors feared that retaliation to the tariffs by other governments could lead to a trade war which in turn can cause global recession. Currently, it has bounced well from the low and while the support holds, the Index can attempt to rise back higher. US NFP scheduled later during the day might give better clarity. Any break below 101 if seen, can open the doors for 100 or even 98.

EURUSD (1.1076) has surged significantly, even past our mentioned target of 1.11 to the level of 1.1146 before coming down. Now, the higher resistance is coming at 1.12 and while it holds, a fall back towards 1.10-1.09 can happen. Only if a break past 1.12 is seen, can extend the rise further.

EURINR (94.4176) tested the resistance near 95 before cooling down. Only a decisive break past 95 can take it to the higher resistance at 97. Else, while below it, an initial fall to 93.50 can be seen before attempting to rise back higher.

EURJPY (161.79) continues to remain volatile within its immediate range of 164-160. A decisive break on the either side will be needed for further directional clarity.

Dollar-Yen (146.26) was anticipated to fall towards 146-144 before recovering back from there. In line with that, a low of 145.19 was seen before it recovered from there. While the deeper support at 144 holds, the pair can bounce back towards 146-148 in the near term. At the same time, if any break below 144 happens, can be strongly bearish for the pair.

USDCNY (7.2808) has declined a bit from the high of 7.30 on the Dollar weakness. Still, while above 7.26, it can again target 7.30. Thereafter, a confirmed break past 7.30 will be needed to take it higher to 7.33/35 in the near term.

Aussie (0.6284) continues to remain volatile within its range of 0.62-0.64 region. The pair needs to give a decisive break on the either side for further directional clarity.

Pound (1.3095) was anticipated to rally towards 1.35. So far, a high of 1.3207 has been observed before the pair slipped slightly lower. While the pair sustains above 1.300-1.295, the target of 1.35 is kept alive.

USDINR (85.2560) yesterday fell to the level of 85.4275 in the onshore markets. Currently on the NDF it is trading near 85.25 region. We anticipate further weakness towards 85.00-84.80 in the near term before a potential rebound to higher levels takes place.

The US Treasury yields have declined further. The bearish view is intact. As mentioned yesterday, the extended fall is more likely to happen going forward. The German yields have come down. They have limited room on the downside to test their support. After this fall the broader uptrend is likely to resume. The 10Yr GoI has inched up, but it is unlikely to sustain. We expect the yield to fall further in the coming days.

The US 10Yr (4.01%) and 30Yr (4.45%) Treasury yields have come down further. The 10Yr has come down to 4% while the 30Yr has room to test 4.3%. As mentioned yesterday, a deeper fall to 3.8% (10Yr) and 4.1% (30Yr) is also possible over the medium term.

The German 10Yr (2.65%) and 30Yr (3.04%) yields are oscillating up and down. The dip to 2.6% (10Yr) and 3% (30Yr) is happening first as expected. Thereafter we expect the yields to resume the uptrend targeting 3% (10Yr) and 3.3%-3.4% (30Yr) on the upside.

The 10Yr GoI (6.4971%) has inched up. A fall to 6.45%-6.4% looks likely before a reversal is seen.

The global equity market is welcoming Trump’s discounted reciprocal tariff rate negatively. The Dow Jones plummeted by nearly 4%, and a expected fall towards 40000-39000 is happening fast than expectations. Similarly, DAX looks bearish towards 21500-21300. Nifty can come down to 23000-22800 before seeing a rise to 23500 and beyond. Nikkei is heading towards the testing a key support at 33000. Shanghai is closed today.

The Dow (40545.93, -3.98%) opened with a wide gap-down and tumbled yesterday. The fall to 40000-39000 is happening much faster than expected.

DAX (21717.39, -3.01%) has declined sharply, breaking the 22200-23500 range on the downside. The fall to 21500-21300 will happen now.

Nifty (23250.10, -0.35%) can fall to 23000 or 22800 (max) and then rise back to 23500 and higher.

Nikkei (33818.13, -2.64%) has fallen below 34000 and is heading towards the support of 33000 as expected. Thereafter, we might see a bounce from the support of 33000.

Shanghai (3342.0077, -0.24%) is closed today.

Brent and WTI crude have dropped on tariff concerns but could rebound toward $ 72–$ 74 and $ 68–$ 70 respectively if support levels hold. Gold remains under pressure below $ 3,200 and may fall toward $ 3,000, while silver continues its bearish trend with potential to dip to $ 30. Copper has broken below $ 4.90 and could slide further to $ 4.70. Meanwhile, natural gas is showing strength above $ 4.00, with room to rise toward $ 4.40 in the near term.

Brent ($ 70) has tanked to a low of $ 69.48 yesterday on tariff fears. As long as the immediate support at $ 68 holds, a bounce back towards $ 72–$ 74 looks more likely in the near term.

WTI ($ 66.53) has plunged to a low of $ 65.98. While the support at $ 64 holds, we expect a rebound towards $ 68–$ 70 in the coming sessions.

Gold ($ 3,117.40) tested a low of $ 3,073.50 yesterday. While it remains below $ 3,200, it stays vulnerable for a decline towards $ 3,100–$ 3,000 in the near term.

Silver ($ 31.57) has fallen sharply, well below our expected levels. It can continue its bearish move towards $ 31.00–$ 30.00 in the near term.

Copper ($ 4.7815) has, as expected, broken below $ 4.90 and declined to current levels. A further drop towards $ 4.70 looks likely in the near term.

Natural Gas ($ 4.1180) has risen above $ 4.00, and while it remains above this level, a further rise towards $ 4.20–$ 4.40 can be expected in the coming weeks.

5:00 10:30 IN Services PMI
… Exp 59.6 … Expected 57.7 … Previous 59.0

12:30 18:00 US NFP
… Exp 191K … Expected 139K … Previous 151K

12:30 18:00 US Unemployment Rate
… Exp – … Expected 4.1% … Previous 4.1%

12:30 18:00 US Avg Hrly Earnings
… Exp 0.3 … Expected 0.3 … Previous 0.3

12:30 18:00 US Average Hourly Earnings Production & Non Supervisory Employees
… Exp – … Expected – … Previous 0.29

12:30 18:00 CA Labour Force
… Exp – … Expected 9.9K … Previous 1.1K

DATA YESTERDAY
—————
0:30 06:00 Australia Trade Balance
… Exp – … Expected 5.38 … Previous 5.16 …Actual 2.96

6:30 12:00 CH CPI
… Exp 0.5 … Expected 0.1 … Previous 0.3 …Actual 0.4

9:00 14:30 EU Composite PMI
… Exp – … Expected 50.4 … Previous 50.2 …Actual 50.9

12:30 18:00 US Trade Balance
… Exp -115.8 … Expected -121.5 … Previous -130.7 …Actual – 122.7