Trump said he would be willing to extend the July 8 deadline for completing trade talks with countries before higher tariffs are imposed.The Dollar Index, Euro and the EURINR can meet our targets of 98-96, 1.16 and 99-100 respectively in the near term. EURJPY turned lower from 166.42 and failure to see a rise past 167 can drag it towards 164-163. USDJPY is coming off as anticipated and while below 146, there is a scope for it to extend the fall towards 142-140 in the near term. AUDUSD and Pound can continue to hold their respective ranges of 0.6500-0.6400/635 and 1.34-1.36 in the near term. The USDCNY below 7.20 can extend the fall towards 7.17/15 in the near term. The USDINR, if it fails to sustain above 85.50, can witness an initial fall to 85.25-85.00 before eventually rising towards 86 thereafter. IN CPI and US PPI data releases are scheduled today.

Softer than expected US CPI at 0.1% (0.2%) and Trump’s statement on extending Tariffs deadline led Dollar Index (98.36) to slip sharply to the low of 98.285. The ongoing fall can test 98–96 before halting..

EURUSD (1.1511) and EURINR (98.3681) met our initial target of 1.15 and 98 respectively on the Dollar weakness. While the rise sustains, a test to 1.16 and 99-100 respectively looks likely to happen soon before getting peaked out.

EURJPY (165.82) initially surged to the high of 166.42 before coming down. A strong break past 167 will be needed to bring 170 or higher levels into picture. Else, it can fall back towards 164-163.

Dollar-Yen (143.96) held the resistance near 146 quite well as a test to 145.47 was seen before it turned lower. If the fall persists, it can get extended to 142-140. Overall, the view remains bearish below 146.

USDCNY (7.1869) has risen a bit within its 7.17-7.20 range. Still the targets of 7.17-7.16 are kept alive while the pair trades below 7.20.

Aussie (0.6488) tested the resistance near 0.6550 before coming down. The range of 0.6550-0.6400/635 is likely to persist for a while. Pound (1.3478) on the other hand is trading just below the crucial resistance near 1.36 region. Need to see whether it breaks past it or the immediate range of 1.36-1.34 continues to hold for a while.

USDINR (85.4320) yesterday slipped below 85.50 to the low of 85.41 before closing higher. Failure to sustain above 85.50 can drag the pair initially to 85.25–85.00 before it eventually starts to ascend towards 86.

The US Treasury Yields have declined sharply. That negates the chances of seeing a rise. The yields can fall more from here. A slight rise in the inflation numbers failed to support the Treasury yields. The US Headline CPI increased by 2.38% (YoY) in May from 2.33% seen a month ago. The German yields remain stable. They have room to fall further before seeing a reversal. The 10Yr GoI is inching up in line with our expectation. The yield can rise more in the coming days.

The US 10Yr (4.39%) and 30Yr (4.89%) Treasury yields have come down sharply. The fall to 4.3%-4.25% (10Yr) and 4.8%-4.75% (30Yr) is happening now.

The German 10Yr (2.53%) and 30Yr (3%) yields have inched up. But the downside is still open to test 2.45%-2.4% (10Yr) and 2.9% (30Yr) before a reversal happens.

The 10Yr GoI (6.3708%) is inching up. Our view of seeing a rise to 6.45%-6.5% remains intact.

The Dow and Dax trade slightly lower after the US and China reach a trade framework after their intense talks in London. Dow has support at 42500 above which it can be bullish towards 43000 in the near term. A break above 43000 later can be further bullish for the Dow in the medium term. Dax on the other hand can have scope to fall to 23500 while below 24000. Nifty needs to break above 25200 and sustain to rise to 25400 and higher eventually else, a corrective dip from 25200 if seen can delay the expected rise and instead keep the index ranged within 25200-24800 region for some more time. Nikkei and Shanghai have dipped today but could re-attempt to rise back while above 38000 and 3380; else can be vulnerable to sharp decline in the near term.

The Dow (42865.77, -0.0026%) is trading flat between 42500-43000 region. Immediate trend support is seen at 42500 on the daily chart but the index has to break above 43000 to pick up upward momentum and target higher levels of 44000+.

DAX (23948.90, -0.16%) continues to trade lower. A decline towards 23500 could be seen soon while the index sustains trade below 24000.

Nifty (25141.40, +0.15%) continue to rise and is nearing the 25200 closed on a positive note yesterday but needs to break above 25200 to gain momentum for a further rise to 25400. Else, a range of 25200-24800 can hold for a while on a corrective decline from 25200.

Nikkei (38111.02, -0.81%) has dipped today. While above 38000, the index can attempt to rise back to 38500-38750 in the near term. Failure to hold above 38000 can bring in a fresh medium-term decline. Watch price action while above 38000.

Shanghai (3398.47, -0.12%) has dipped below 3400 again today. Unless a rise back above 3400 is seen soon, the expected rise towards 3450-3500 mentioned yesterday can come into question and the index can fall back towards 3380-3350. Watch price action near current levels for the next few sessions for further clarity.

Crude prices surged past resistance levels, driven by geopolitical tensions, with potential to rise further in the near term. Gold remains range-bound below $ 3,400, while Silver shows a bullish bias above $ 36. Copper is trading within a tight range, awaiting a breakout. Natural gas is at a key level near $ 3.50, with potential to either fall towards $ 3.30 or bounce back to $ 3.80-4.00.

Brent ($ 69.51) broke its immediate resistance and surged to a high of $ 70.83 yesterday following news that the US embassy in Iraq is preparing for evacuation due to rising security risks. The price may rise further towards $ 72–$ 74 in the near term.

WTI ($ 67.92) broke above its immediate resistance and tested a high of $ 68.37 yesterday. A further rise towards $ 70–$ 72 can be expected in the near term.

Gold ($ 3,394.60) is hovering just below its immediate resistance at $ 3,400. As long as this level holds, a range of $ 3,400–$ 3,300 could persist in the near term. A sustained break above $ 3,400 may lead to higher levels of $ 3,500–$ 3,600 in the coming weeks.

Silver ($ 36.47) dipped to $ 36.15 yesterday. The outlook remains biased towards a rise to $ 37–$ 38 in the coming weeks, provided it sustains above $ 36.

Copper ($ 4.8125) has once again retreated to its immediate support level. A range of $ 4.80–$ 5.00 could hold for some time until a breakout occurs on either side.

Natural Gas ($ 3.5230) has declined as anticipated. A break below $ 3.50 could drag prices further down to $ 3.40–$ 3.30. Otherwise, while above $ 3.50, it may gradually rise towards $ 3.80–$ 4.00 in the coming weeks.

6:00 11:30 UK Trade Bal
…kshitij -19.2GBP Bln …Expectation -20.8GBP Bln …Previous -19.9GBP Bln

12:00 17:30 IN CPI
…kshitij 3.58 …Previous 3.16

12:30 18:00 US PPI
…kshitij 0.2% …Expectation 0.2% …Previous-0.5%

12:30 18:00 US PPI ex Food & Energy (MoM)
…kshitij 0.4 …Expectation 0.3 …Previous-0.4

DATA Yesterday
……………

12:30 18:00 US CPI (MoM)
…kshitij 0.2 …Expectation 0.2 …Previous 0.2 …Actual 0.1

12:30 18:00 US Core CPI(MoM)
… 0.2% …Expectation 0.3% …Previous 0.2% …Actual 0.1