JAI HIND!

The US and UK agreed on the trade deal of having 10% baseline tariffs on British imports. As a result, Dollar Index rose to 100.85 and Euro slipped to 1.1196. Now, if the index continues to rise further, can extend it further to 101-102. Similarly, Euro if persists bellow 1.12, can be vulnerable to fall towards 1.11-1.10. EURINR and EURJPY are trading within 97-95 and 164/65-160 region respectively. USDJPY has risen past 145 and if sustained, can head towards 146-147 in the near term. AUDUSD is back below 0.64 again and failure to rise above 0.64 can drag it further to 0.635-0.630. The USDCNY has risen well as anticipated but could face the resistance near 7.26 region. Pound is trading near the lower end of its range of 1.35-1.32. The conflict between India and Pakistan led USDINR to surge sharply to the high of 85.77 yesterday. Immediate resistance is at 86.0-86.15 which can be tested. Thereafter, whether it falls back towards 85 or rises further will have to be seen.

Dollar Index (99.653) has risen sharply to the high of 100.854 on the news of US-UK trade deal of having 10% baseline tariffs on British imports. Now, while above 100.50, the rise can get extended to upper resistance between 101-102 region in the near term. Only if it fails to sustain its rise can get dragged into 100.50-99.0 range again.

EURUSD (1.1207) slipped below 1.12 to the level of 1.1196 before recovering a bit from there. If the spot slips below 1.12 decisively, can be vulnerable to extend the fall towards 1.11-1.10 in the coming sessions. Watch price action closely around current levels to see whether the fall extends further or the range of 1.12-1.14 remains intact.

EURINR (95.9865) observed the high of 96.8173 yesterday before cooling down. A broad range of 97-95 can hold for some time before a break happens on the either side.

EURJPY (162.72) continues to trade within 160-164/65 range.

Dollar-Yen (143.79) has risen past its range of 140-145 and if sustained, can test the higher resistance around 146-147 region.

USDCNY (7.2502) is rising as anticipated but could face the immediate resistance at 7.26 level. While it holds, there could be some scope for the pair to fall back again. Only a strong break past 7.26 can maintain the ongoing bullishness in the trend. Watch price action closely around current levels.

Aussie (0.6392) contrary to our bullish view towards 0.655-0.66, the pair has again slipped below 0.64. Failure to see an immediate rise past 0.64 can drag the pair further towards 0.635-0.630 in the near term. The targets of 0.655-0.660 are kept on hold until further clarity.

Pound (1.3229) is trading lower within its broad range of 1.35-1.32 region. Any break below 1.32 if seen, can open the doors for 1.30 on the downside.

USDINR (84.8730) yesterday surged to 85.77 and is currently trading higher amid escalating tensions between India-Pakistan since the last few days. Immediate resistance is at 86.0-86.15, which could be tested soon. Only if the tensions continue to persist further and Rupee weakens past 86, can turn bullish further. Else can pull back to 85.00-84.50 on the downside.

The US Treasury yields have risen back sharply. A further rise breaking above the immediate resistance can take the yields higher in the coming days. That will negate our earlier view of seeing a fall. The German yields have moved up sharply and are poised at their resistance. A strong follow-through rise from here is needed to move further higher and avoid falling back. The 10Yr GoI has risen sharply within its range. Need to see if it is managing to break the range on the upside to move higher or not.

The US 10Yr (4.37%) and 30Yr (4.83%) Treasury yields have risen back sharply. A rise above 4.4% (10Yr) and 4.85% (30Yr) can take the yields up to 4.5%-4.55% and 5% (30Yr) in the coming day. That will negate the fall 4.2% (10Yr), 4.7% (30Yr) that we were expecting earlier.

The German 10Yr (2.53%) and 30Yr (2.99%) yields have risen back again and are near their resistance at 2.55% and 3% respectively. A strong break above these resistances is needed to negate falling back to 2.4%-2.35% (10Yr) and 2.8%-2.7% (30Yr). We will have to wait and watch.

The 10Yr GoI (6.3926%) has risen sharply within the 6.3%-6.4% range. It is now poised at the upper end of its range. We will have to wait and see if it is breaking above 6.4% to rise further up to 6.5% or is it going to retain the range.

Dow Jones has dipped from 41773 but could have scope to test 42000-42200 before extending its decline further. Dax looks bullish towards 24500-24800. Nifty can test 23900 on a break below 24200 but overall the long term could be bullish while above 23900. We may expect volatility admist India-Pak war escalation. Nikkei is strong today heading towards 38000-38500 while Shanghai is subdued but could eventually move up towards 3400 while above 3300.

The Dow (41368.45, +0.62%) has come-off from its high of 41773. A test of 42000-42200 looks more likely to be seen first. The price action thereafter will need a close watch.

DAX (23352.69, +1.02%) has risen back sharply. The bullish view is intact to see 24500-24800 on the upside. The chances of the corrective fall to 22500-22400 mentioned yesterday stands reduced.
 
Nifty (24273.80, -0.58%) fell within the current 24200-24600 range. A fall to 23900 is possible if 24200 is broken. However, while above 23900, the bias will continue to remain bullish to see a rise to 24700-25000.

Nikkei (37358.03,  +1.16%) is trading strong today, breaking above our mentioned resistance at 37000. The next target is 38000-38500 region which can be tested in the next few sessions looking at the rising momentum of the index.

Shanghai (3347.17, -0.14%) looks stable just now but while above 3300, there is room to rise towards initial resistance at 3400.

Crude oil prices have rebounded but can remain within their respective ranges as key resistances hold. Gold has unexpectedly broken below $ 3,300 and looks set for further weakness, while Silver also dipped, likely staying in a $ 34–$ 32 range. Copper has turned bearish after breaking support, and natural gas remains under pressure below $ 3.75, with potential downside towards $ 3.50–$ 3.40 if resistance isn’t breached.

Brent ($ 62.90) has bounced back to its immediate resistance due to the news of the US-UK trade deal. While the resistance holds, a range of $ 65–$ 58 could persist for some time.

WTI ($ 59.99) has also rebounded, but as long as the immediate resistance holds, a range of $ 62–$ 55 could remain intact for some time.

Gold ($ 3,293.20) has broken below $ 3,300, contrary to our expectations, and appears vulnerable to a further decline towards $ 3,200–$ 3,100 in the coming weeks.

Silver ($ 32.51) has dipped back to the $ 32.30 level, contrary to our expectations. A range of $ 34–$ 32 could hold for some time.

Copper ($ 4.50) Our bullish view has turned out to be incorrect, as it has broken below its immediate support and now looks bearish towards $ 4.40–$ 4.20 in the coming weeks.

Natural Gas ($ 3.6340) has seen a slight dip yesterday and continues to struggle to break above $ 3.75 over the past few sessions. Only a sustained move above this level could take it higher towards the previously mentioned $ 4.00–$ 4.20 range. Otherwise, it remains vulnerable to a decline towards $ 3.50–$ 3.40.

1:30 07:00 CN CPI (YoY)
… Exp – …Expected – … Previous -0.1

1:30 07:00 CN PPI
… Exp – …Expected – … Previous -2.5

12:30 18:00 CA Labour Force
… Exp – …Expected 24.5K … Previous -32.6k

DATA YESTERDAY
……………
1:00 16:30 BOE Mtg
… Exp – … Expected 4.3% … Previous 4.5%

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