The U.S. announced 104% duties on Chinese imports, set to take effect shortly after midnight. The Dollar Index on confirmed break below 102 can turn bearish to 101-100. The Euro above 1.09/085 can attempt to rise back towards 1.11-1.12. EURINR has risen past 95 and if sustained, can head towards 96-97. USDJPY and EURJPY can trade within 148-144 and 160-164 region respectively for now. AUDUSD has slipped below 0.60 and can be vulnerable to fall to 0.575. The USDCNY can soon test 7.35. Thereafter, whether the rise extends to 7.40 or now will have to be seen. Pound above 1.27 can again attempt to rise towards 1.29-1.30. USDINR has risen well so far. Immediate resistance is coming at 86.40/50 region. Watch price action closely around it to see whether it holds, or the pair breaks higher. Watch out for the RBI MPC meeting scheduled today.

Donald Trump announced 104% tariffs on imports from China. Dollar Index (102.994) has been coming off as anticipated and a confirmed break below 102 is needed to open the doors for 101-100 on the downside.

EURUSD (1.1026) has risen past 1.10 again on Dollar weakness. For now, we retain our view of seeing a rise towards 1.11-1.12, as long as support at 1.085-1.090 stays intact.

EURINR (95.1178) has finally given a break past 95 and if sustained, can extend it further to 96-97.

EURJPY (160.67) yesterday tested the high of 162.20 before coming down sharply to the low of 159.63. Currently it is back within 160-164 range but while below 162, cross could be vulnerable to head towards the deeper support at 155.

Dollar-Yen (145.85) is trading lower within 148-144 region. A strong support is coming at 144. While it holds, pair can attempt to rise back again.

USDCNY (7.3492) can soon test our target of 7.35. Thereafter, a confirmed break past 7.35 will be needed to head towards 7.40.

Aussie (0.5980) failed in its attempt to rise past 0.61 and started coming off from 0.6085 itself. Now, while below it, danger of falling to 0.575 cannot be ruled out.

Pound (1.2814) is rising as anticipated and if sustained above 1.27, can head back towards 1.29-1.30 in the coming sessions.

USDINR (86.3580) yesterday surged significantly to the high of 86.29. A near term resistance can be seen around 86.40-50 region that can hold on first testing. But in case it breaks higher, then levels near 86.80 can be seen. RBI MPC scheduled today would be important to watch as the market expects 25 bps rate cut in the meeting.

The US Treasury yields have surged further. The resistances mentioned yesterday are broken. That negates the fall that we have been expecting. The yields will now have more room to rise from here. The US CPI data release will need a close watch today. The German yields remain stable. A strong follow-through rise from here will strengthen the bullish case. The 10Yr GoI remains stable. There is limited room on the downside from here. We expect the yield to sustain above its support and rise eventually going forward. The RBI monetary policy meeting outcome is due today.

The US 10Yr (4.33%) and 30Yr (4.82%) Treasury yields have surged further and are above 4.3% and 4.7% respectively. While this sustains, the 30Yr can rise to 5%. The 10Yr on the other hand can rise to 4.6% and higher on a strong break above 4.45%.

The German 10Yr (2.63%) and 30Yr (3.03%) yields remain stable above 2.6% and 3% respectively. A strong follow-through rise from here will strengthen the bullish case for a rise to 3% (10Yr) and 3.3%-3.4% (30Yr). A break below 2.5% (10Yr) and 2.9% (30Yr) is needed to negate this bullish view and drag them to 2.4%-2.3% (10Yr) and 2.8%-2.7% (30Yr).

The 10Yr GoI (6.4747%) sustains above 6.45% but is struggling to rise. The downside is expected to be limited to 6.4%. While 6.4% holds, the 10Yr GoI can rise to 6.6%-6.65% eventually going forward.

The Dow Jones has fallen below 37900; the risk of seeing a fall towards 36500-36000 cannot be ruled out. A strong rise past 40000 is required to avoid this fall. DAX has risen to 19500, and continuing this momentum, it can rise towards 21000-21200. Nifty is moving higher towards 22800-23000. Nikkei needs a rise past 33000 to avoid falling towards 30000. As Trump levied a 104% tariff on China , Shanghai initially fell to a low of 3070 before recovering. While it sustains above 3100, it can rise past 3150 and extend the rise towards 3200-3250.

The Dow (37645.49, -0.84%) has declined sharply below 37900 again. This keeps alive the danger of seeing 36500-36000 on the downside. A strong rise above 40000 is needed to negate this fall. But that seems unlikely.

DAX (20280.26, +2.48%) has risen above 19500. While this sustains, a rise to 21000-21200 is possible. But thereafter we need to watch closely to see if a reversal is happening again or not.

Nifty (22535.85, +1.69%) continues to move up. This keeps intact our view of seeing 22800-23000.

Nikkei (32146.99, -2.62%) plummets to a low of 31721 before recovering above 32000. Further, it needs to rise above 33000 to negate the re-test of support at 30000 and move higher towards 36000.

Shanghai (3143.5059, -0.08%) fell to an intra-day low of 3070 and recovered from there. Further, a rise past 3150 would extend the rise towards 3200-3250.

Crude prices have declined as expected, with further downside towards $ 55 (Brent) and $ 50 (WTI) likely. Gold is hovering near $ 3000, with a break below $ 2970 needed to trigger a fall to $ 2950–$ 2900; else, it may rise towards $ 3100–$ 3150. Silver remains weak below $ 32, with potential to drop to $ 28–$ 26. Copper pulled back after testing $ 4.3650; support at $ 4.00 is key to maintaining bullish momentum towards $ 4.60. Natural Gas slipped below $ 3.60 but may find support at $ 3.50; a break below this could lead to $ 3.00.

Brent ($ 60.27) has declined as anticipated. A further drop towards $ 55 could occur in the near term.

WTI ($ 56.77) has also fallen in line with expectations. A continued decline towards $ 50 looks possible in the coming sessions.

Gold ($ 3002.50) continues to hover around the $ 3000–$ 2970 levels. A sustained break below this would be required to open the door for lower targets of $ 2950–$ 2900. Otherwise, it may gradually rise towards $ 3100–$ 3150 in the coming weeks.

Silver ($ 29.47) has dipped as expected. While it remains below $ 32, a fall towards $ 28–$ 26 seems more likely in the coming weeks.

Copper ($ 4.1250) tested a high of $ 4.3650 as expected, before falling back sharply to close at $ 4.1440 yesterday. As long as support at $ 4.00 holds, a rise towards $ 4.40–$ 4.60 remains likely in the near term. However, a sustained break below $ 4.00 could turn bearish for copper, opening lower levels of $ 3.60–$ 3.20 in the coming months, though this looks less likely for now.

Natural Gas ($ 3.4930) has slipped below $ 3.60, contrary to our expectations. However, crucial support is seen near $ 3.50 on the weekly chart, which may hold and push prices higher towards $ 3.60–$ 3.80 in the coming weeks. Alternatively, a sustained break below this support would confirm further bearishness towards $ 3.00.

4:30 10:00 RBI Repo Rate
… Exp – … Expected 6.00% … Previous 6.25%

4:30 10:00 RBI Rev Repo Rate
… Exp – …Expected – … Previous 3.35%

4:30 10:00 RBI MSF
… Exp – …Expected – … Previous 6.5%

DATA YESTERDAY
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No major data released yesterday.