The German parliament elected conservative leader Friedrich Merz as chancellor. The Dollar Index continues to hold the range of 99.0-100.5. A confirmed fall below 99 can open the doors for 98-96. The Euro has risen a bit but still needs to break past 1.14 to head towards 1.16-1.18. EURINR has risen past 96 and a confirmed break past 96.50 can take it higher towards 98-99 as well. EURJPY and USDJPY are trading lower within their range of 164-160 and 145-140 respectively. AUDUSD has risen well and if sustained, can test 0655-0.66 in the near term. The USDCNY can soon test 7.20 on the downside. Pound can trade within 1.32-1.35 region for a while. USDINR below 84.75, can hold the range of 84.75-84.00 for a while. Watch out for the FOMC meeting scheduled today.

Dollar Index (99.54) continues to trade within its narrow range of 99.00-100.50 region. A confirmed break below 99 can open the doors for 98-96 in the near term. Immediate upside is capped at 101.

EURUSD (1.1340) yesterday tested the high of 1.1381 after the German parliament elected conservative leader Friedrich Merz as chancellor. Still, the pair needs to see rise past 1.14 to confirm the anticipated rise to 1.16-1.18. Else, failure to do so can initially take it towards 1.12 before turning higher.

EURINR (96.0174) rose to the level of 96.5641before cooling down. While above 95.0-94.5, the cross has a scope to rise towards 98-99 as well but will have to wait for a confirmation past 96.50.

EURJPY (162.32) and Dollar-Yen (143.06) are trading lower within their respective ranges of 164-160 and 145-140.

USDCNY (7.2262) in line with our bearish view, the pair tested the low of 7.2110. Soon it can test 7.20 on the downside. Thereafter, whether it bounces back towards 7.3 again or extends the fall to 7.10 will have to be seen.

Aussie (0.6489) is rising as anticipated and if sustained above 0.645 can extend it further to 0.655-0.660.

Pound (1.3349) has bounced well from the level of 1.3259. Overall, it can continue to trade within 1.33-1.35 region for a while.

USDINR (84.6460) had risen past 84.50 to the high of 84.6325 before closing lower. Overall, while below 84.75, a range of 84.75-84.00 is likely to persist in the near term.

The US Treasury yields have dipped slightly. Failure to rise back immediately from here can drag them down in the coming days. The outcome of the US Federal Reserve meeting tonight will need a close watch. The Fed is likely to keep the rates unchanged. However, it will be important to see if Jerome Powell is saying anything on the impact of tariffs. The German yields are poised at their key resistances. A reversal from here will keep the broader downtrend intact. The yields can fall in that case. The 10Yr GoI remains stuck in its narrow range.

The US 10Yr (4.29%) and 30Yr (4.80%) Treasury yields have come-off slightly. They have to rise back from here to keep the chances alive of seeing the rise to 4.4%-4.5% (10Yr) and 4.9%-5% (30Yr). Else the yields can fall back to 4.2% (10Yr), 4.7% (30YR) and even lower.

The German 10Yr (2.54%) and 30Yr (3%) yields have come up to their resistances. A reversal from here can drag the yields down to 2.4%-2.35% (10Yr) and 2.8%-2.7% (30Yr). We will have to wait and watch.

The 10Yr GoI (6.3508%) has risen back and is retaining its 6.3%-6.4% narrow range. A breakout on either side of this range will determine whether the yield can fall to 6% or rise to 6.5%.

Dow Jones has fallen and can head to 40000 on a fall below 40700 while the Dax still signals some strength as it bounced from the intra-day low of 22861. We keep intact the target of 24500-24800 on a break above 23500 in the coming sessons.Nifty could decline on news of overnight attack on Pakistan by India. However, we may expect immediate downside to be limited to 23900. Nikkei has dipped as resistance at 37000 holds well. A dip to 36500-36000 could be possible. Shanghai has risen sharply and can head towards resistance at 3400.

The Dow (40,829, -0.95%) has come down. A fall below 40700 can drag it down to 40000-39900. It will then reduce the chances of seeing the rise to 42000-42200.
 
DAX (23249.65, -0.41%) has closed lower. But the strong bounce from its intraday low of 22861 indicates that presence of strong buyers. That keeps intact our bullish view to break 23500 and rise to 24500-24800 going forward.

Nifty (24379.60, -0.33%) may fall today on the back of the overnight attack on Pakistan. However, 23900 can limit the downside in case of a fall below 24200. While above 23900 the broader bullish view of seeing 24700-25000 will remain intact.

Nikkei (36794.96,  +0.097%) trades lower. It seems to have held the resistance at 37000 for now and can see a corrective fall towards 36500-36000 if the dip sustains.

Shanghai (3341.62, +0.77%) rose sharply breaking above 3300 contrary to our expectation of an initial dip to 3250. Now while the index sustains above 3300, it can target resistance at 3400 before seeing any corrective dips.

Brent and WTI have risen unexpectedly but face key resistance levels that could cap gains and trigger a pullback in the coming weeks. Gold surged as expected but needs to sustain above $ 3,400 to advance further; otherwise, it risks a decline. Silver remains bullish above $ 33.00, targeting $ 34.00–$ 34.50. Copper continues its upward momentum toward $ 4.80–$ 4.90, while Natural Gas holds support at $ 3.47, keeping the outlook positive for a rise to $ 3.80–$ 4.00.

Brent ($ 62.52) has not declined as expected; instead, it has rebounded above $ 62. Immediate resistance is seen near $ 63–$ 64, which could hold and push the price lower towards $ 58–$ 56 in the coming weeks.

WTI ($ 59.56) is moving higher contrary to our expectations, but faces immediate resistance near $ 61–$ 62, which could trigger a decline towards $ 56–$ 54 in the coming weeks.

Gold ($ 3,385.10) surged to a high of $ 3,444.50 yesterday, in line with our expectations. However, it has fallen back below $ 3,400, today. A sustained move above $ 3,400 is required for a further rise towards $ 3,500. Otherwise, a reversal towards $ 3,300–$ 3,200 is possible.

Silver ($ 33.14) rose to $ 33.47 yesterday but has slipped back to $ 33.00 today. While above $ 33.00, we expect it to rise towards $ 34.00–$ 34.50 in the near term.

Copper ($ 4.7550) continues to rise as expected and may advance towards $ 4.80–$ 4.90 in the coming sessions.

Natural Gas ($ 3.5720) tested a low of $ 3.47 yesterday. As long as this support holds, we maintain our view of a potential rise towards $ 3.80–$ 4.00 in the near term.

22:30 04:00 AU PMI
… Exp – … Expected – … Previous -29.7

9:00 14:30 EU Retail Sales
… Exp 1.4% … Expected -0.1% … Previous 0.3%

18:00 23:30 US FOMC Meeting
… Exp – … Expected <4.50% ... Previous <4.50%
DATA YESTERDAY
……………
5:00 10:30 IN Services PMI
… Exp 57.8 … Expected 59.1 … Previous 58.5 …Actual 58.7

12:30 18:00 US Trade Balance
… Exp -109.1 … Expected -124.7 … Previous -122.7 …Actual – 140.5