Donald Trump announced a cease-fire agreement between Iran and Israel which was later denied by Iran. Iran had also struck missiles in US bases in Qatar, Iraq and Syria. The Dollar Index can have downside limited to 97-96 and can rise back towards 99 in the near term. Euro and EURINR have upside capped at 1.17 and 100.50 levels respectively. While it holds, both the pairs are likely to witness a corrective fall in the near term. EURJPY and USDJPY have declined from the level of 169.71 and 148 and if the fall persists, a test to 166/65 and 144 can happen respectively before it attempts to rise back again. USDCNY is trading lower within the 7.20-7.17/16 range. The Aussie and Pound are likely to remain volatile within 0.6350-0.6550 and 1.33-1.36 regions respectively, before a break happens on either side. Watch price action closely in USDINR to see whether it sustains above 86.50 and rises toward 87.00-87.20 or falls below 86.50. US Case Schiller and Consumer Confidence data releases are scheduled today.

Dollar Index (98.23) slipped sharply to the level of 98.13 after Donalnd Trump announced a cease fire between Iran and Israel. Later Iran stated that no cease fire is agreed as of now from their side. The downside is expected to be limited to 97-96 and eventually it can rise back towards 99.

EURUSD (1.1592) has tested our initial target of 1.16 on the upside. The strong resistance is coming at 1.17, suggesting limited upside. Either from current levels or upon testing 1.17, the pair can decline towards 1.15 in the coming sessions.

EURINR (99.8536) rose to the level of 100.20 before turning lower. While the resistance near 100.50 holds, a corrective fall towards 99-98 can be witnessed in the near term.

EURJPY (168.44) in line with our bullish view, tested 169.71 on the upside before declining a bit. If the fall continues further, a test to 166-165 can happen before the cross attempts to rise back again. A strong break past 170 if seen, can take it higher towards 175 as well.

Dollar-Yen (145.50) was anticipated to rise towards 149-150 while it trades above 146, instead the pair turned lower from the level of 148 itself. Immediate support is coming at 144 which can be tested soon in the near term before it resumes its rise towards 148-150.

USDCNY (7.1773) is trading lower within its immediate range of 7.20-7.17/16. The range is likely to hold for some time before a decisive break happens on either side.

Aussie (0.6424) and Pound (1.3432) observed the low of 0.6372 and 1.3369 but later recovered as well. Currently both the pairs are trading higher within their respective ranges of 0.635-0.655 and 1.33-1.36. .

USDINR (86.5330) in line with our view tested 86.8850 before closing below it. While above 86.50, the pair can target 87.00-87.20 in the near term. Only if the USDINR dips below 86.50, can test the lower levels of 86.25-86.00, thereby delaying the anticipated fall.

The US Treasury yields have declined sharply. Crude Oil price tumbling about 9% has dragged the yields down. The yields are coming down within their range. We retain our bearish bias to see a downside break of the range and more fall going forward. The German Yields have dipped slightly. The view remains bearish to see more fall from here. The 10Yr GoI seems to be struggling to break the range on the upside. This can keep it inside the range for some more time. But the bias continues to remain bullish to see an upside breakout of the range and a rise eventually.

The US 10Yr (4.34%) and 30Yr (4.87%) Treasury yields have declined sharply. The yields are coming down towards the lower end of their 4.3%-4.55% (10Yr) and 4.8%-5% (30Yr) range. We expect them to break the range on the downside and fall to 4.1% (10Yr) and 4.6% (30Yr) eventually.

The German 10Yr (2.50%) and 30Yr (2.96%) yields have dipped slightly. While below 2.6% (10Yr) and 3.1% (30Yr), the view is bearish to see a fall to 2.4% (10Yr) and 2.85%-2.8% (30Yr).

The 10Yr GoI (6.3767%) seems to be struggling to breach 6.4% decisively. For now, the 6.3%-6.4% range is intact. But we remain bullish to see a break above 6.4% and a rise to 6.5% eventually.

Equity indices are showing mixed signals. The Dow has bounced back strongly and could turn bullish above $ 42,700, while DAX holds above $ 23,000 with potential to rise to $ 23,800. Nifty may open higher and target $ 25,200–$ 25,300, supported by the $ 24,700 zone. Nikkei has broken above $ 38,500 and may head towards $ 40,000, and Shanghai remains firm above $ 3,350 with scope to rise to $ 3,500.

The Dow (42581.78, 0.89%) has risen back sharply, thereby reducing the danger of the fall to 41500-41000 mentioned yesterday. A strong rise past 42700 could turn the outlook bullish to breach 43000 and rise further. We will have to wait and watch. For now, 42000-42700 is the range.

DAX (23269.01, -0.35%) has dipped slightly. Support is at 23000. While that holds, there are good chances to see a rise to 23500-23800 in the coming days.

Nifty (24971.90, -0.56%) can open with a gap-up and attempt to rise to 25200-25300. Good support is there now in the 24800-24700 region.

Nikkei ($ 38,872.02, +0.59%) has broken above $ 38,500, contrary to our expectations, and could extend its gains towards $ 39,000–$ 40,000 in the near term.

Shanghai ($ 3,398.25, +0.49%) has held above $ 3,350, and while it sustains this level, a further rise towards $ 3,450–$ 3,500 is possible in the near term.

Crude prices dropped sharply after Iran’s mild retaliation and Trump’s ceasefire claims, with Brent and WTI now expected to trade in the $ 65–$ 75 and $ 64–$ 70 ranges respectively. Gold is declining towards $ 3,300, Silver could bounce from $ 35 support and target 36.50-37.00. Copper remains range-bound between $ 4.75–$ 5.00 for some time. Natural gas has turned bearish below $ 3.80, and can target $ 3.60–$ 3.50.

Brent ($ 69.51) initially broke above $ 80 and rose to a high of $ 81.84 before plunging to $ 69.54 yesterday. The sharp decline followed Iran’s less severe-than-expected retaliation for the US attack on its nuclear sites, which spared US energy assets. Brent has opened lower today as Trump announced an immediate ceasefire between Iran and Israel. However, Iran’s foreign minister has rejected this claim, stating that no such agreement exists. Brent is likely to remain volatile for some time, and we may see a range of $ 65–$ 75 in the near term.

WTI ($ 66.34) rose to a high of $ 78.40 but then dropped sharply to a low of $ 66.60 yesterday, contrary to our expectations of a rise. Today, it has seen a low of $ 64.38 so far, with immediate support near $ 64. While this support holds, we may see a range of $ 64–$ 70 for some time. A break below $ 64 could drag price further down towards $ 60–$ 58.

Gold ($ 3,357.50) is inching down in line with our expectations and could fall towards $ 3,330–$ 3,300 in the near term.

Silver ($ 35.94) has risen slightly. As long as immediate support near $ 35.50–$ 35.00 holds, we expect a bounce back towards $ 36.50–$ 37.00 in the near term.

Copper ($ 4.8715) has risen and is likely to trade within the range of $ 4.75–$ 5.00 for some time until a decisive breakout occurs.

Natural Gas ($ 3.7780) has broken below $ 3.80, contrary to our expectations. While below this level, it could fall towards $ 3.60–$ 3.50 on the downside.

9:00 14:30 GER IFO Business Climate
86.7 …Expectation 88.0 …Previous 87.5

9:00 14:30 GER IFO Business Situations
85.6 …Expectation 86.5 …Previous 86.1

9:00 14:30 GER IFO Business Expectations
87.7 …Expectation 89.5 …Previous 88.9

12:30 18:00 US Current Account Balance
…Expectation -444.0 …Previous -303.9

12:30 18:00 CA Inflation Y/Y
…Expectation 0.5 …Previous 1.7

13:00 18:30 US Case Schiller
…Expectation 4.2 …Previous 4.1

14:00 19:30 US Cons Conf
87.5 …Expectation 99.1 …Previous 98.0

DATA Last Friday

14:00 19:30 US Existing Home Sales
3957k …Previous 4000k …Actual 4030