FED Chair Jerome Powell said that the Fed is taking a patient approach to further interest rate cuts, but didn’t rule out a reduction. The Dollar Index has held the support near 96 for now. A further rise within its immediate range of 96-98/99 is possible. The Euro on the other hand is coming off from the high of 1.1829 and can test the support near 1.17 before attempting to rise back. EURINR needs to see a decisive rise past 101 to turn bullish in the near term. EURJPY on a break past 170 can head towards 175, else a corrective to 168-166 can happen. USDJPY below 144 can get dragged towards 142-140. Only an immediate rise past 144 can negate the fall. USDCNY has deeper support at 7.15/14, while it holds, the pair can attempt to rise back towards 7.18 or higher. The Aussie and Pound continue to hold below the respective resistances near 0.66 and 1.38 and are likely to fall further in the near term. USDINR is trading within a narrow range of 85.75-85.45. Overall, while below 86, the targets of 85.25-85.00 are kept open for now. US ADP Employment data release is scheduled today.

Dollar Index (96.76) extended the fall to 96.37 before recovering from there. Dovish hints from the FED chair and the potential impact of Trump’s spending bill supported the fall. For now, a fall below 96 is not anticipated. Chances are that a bounce back towards 98 could happen. Overall, a near term range of 96-98/99 can hold. Our view can go wrong only if a decisive break below 96 happens.

EURUSD (1.1796) tested initial target near 1.1829 before coming down. Immediate support is coming at 1.17, which can be tested if the pair declines further. Thereafter, while the support holds, it can bounce back again. Only a rise past 1.1 can bring 1.20 into picture.

EURINR (101.0125) is trading near the 101 level, a decisive break past which can take it towards 102 and higher. Else, it can decline towards the support near 100 before attempting to rise back.

EURJPY (169.06) needs to see a break past 170 to head towards the upper resistance at 175. Else, the cross can be vulnerable to fall back towards 168-166 in the near term.

Dollar-Yen (143.60) had slipped to the low of 142.68 but later recovered as well. Still, while below 144 the targets of 142-140 are kept alive for now. Only an immediate rise past 144 can negate the anticipated fall.

USDCNY (7.1658) observed the low of 7.1565 before rising a bit from there. A deeper support is evident near 7.15/14, above which the pair is likely to rise back towards 7.18 or even 7.20 as well.

Aussie (0.6570) faces immediate resistance at 0.66 and while it holds, the pair can continue to trade within the 0.66-0.645 region.

Pound (1.3743) tested the resistance near 1.38 before cooling down. Failure to see a break past 1.38 can drag it further to the interim support near 1.36 in the coming sessions. A rise past 1.38 if seen, can take it towards 1.40 as well before halting.

USDINR (85.6220) witnessed a low of 85.4625 yesterday. An immediate range of 85.75–85.45 could hold for some time, before a breakout happens on either side. The lower targets of 85.25-85.00 are kept alive for now while the USDINR trades below 86.00.

The US Treasury yields have bounced slightly. But it is likely to be short-lived as the resistance ahead can cap the upside. The yields are likely to fall back and keep the bearish view intact. The German yields have reversed lower as expected. The resistances have held well in line with our expectation. The yields can fall more from here. The 10Yr GoI is falling within its range. The expected bullish breakout of the range is getting delayed.

The US 10Yr (4.24%) and 30Yr (4.77%) Treasury yields have bounced slightly. The view remains bearish to see a fall to 4.1% (10Yr) and 4.6% (30Yr). Resistance at 4.3%-4.35% (10Yr) and 4.8%-4.85% (30Yr) can cap the upside.

The German 10Yr (2.57%) and 30Yr (3.05%) yields have reversed lower as expected. The resistance at 2.6% (10Yr) and 3.1% (30yr) has held well. That keeps intact our view of seeing a fall back to 2.4% (10Yr) and 2.85%-2.8% (30Yr).

The 10Yr GoI (6.3515%) is coming down within its 6.3%-6.4% range. The lower end of the range can be tested now. The expected bullish breakout above 6.4% and the rise to 6.5% is getting delayed.

The Dow Jones seems to be in a strong uptrend and is headed towards 45000-46000 while above 44450. Dax, on the other hand, has continued to decline and could test 23500 soon. Thereafter, failure to hold above 23500 can extend its fall to 23000-22800 before a sharp rebound comes in. Nifty has been stable yesterday but has scope to rise towards 25800-26300 while above support at 25400. Nikkei continues to see profit taking on concerns of US-Japan trade negotiations and could extend its fall to a maximum of 38500 before rebounding higher in the medium term. Shanghai could consolidate between 3415-3465 region for the near term before extending its rise in the longer run.

The Dow (44494.94, +0.91%) seems to be in a strong uptrend and has broken past the 44200 level. It can now target higher levels of 45000-46000 as mentioned in yesterday’s edition.

DAX (23673.29, -0.99%) has fallen sharply by about 1% and could test 23500 before attempting to rebound from there. Failure to hold above 23500 can make it vulnerable to extend decline to 23000-22800 in the coming sessions. The upside target of 24500-25000 mentioned yesterday can be delayed by a few sessions if the current dip extends towards 23000-22800. Watch price action at 23500 in the next few sessions.

Nifty (25541.80, +0.097%) was stable yesterday but the overall outlook remains bullish for an eventual rise towards 25800-26300 while above immediate support at 25400.

Nikkei (39615.04, -0.93%) continues to see profit taking extending the loss from yesterday triggered by the US-Japan trade deal concerns ahead of the July 9 deadline. It is headed towards our expected 39000/38500 zone in the coming days from where a bounce back can be expected towards 40000 or higher again in the longer run as clarity is expected on the US-Japan trade negotiations.

Shanghai (3451.55, -0.18%) seems to be holding below immediate resistance near 3460/3465 below which a consolidation can be seen within 3465-3415 region for a while. Thereafter, we may expect an eventual rise towards 3500 and higher in the longer run.

Crude prices are holding above support and could rebound towards $ 70–$ 72 and $ 68–$ 70 respectively. Gold and Silver remain firm and may rise further to $ 3,400 and $ 37.5 respectively. Copper faces resistance at $ 5.15, and while below it, could dip to $ 5.00. Natural Gas remains weak and a sustained break below $ 3.40 may trigger a fall to $ 3.00, though a bounce to $ 3.60 is also possible if support holds.

Brent ($ 67.10) has risen above support, and while this support holds, we continue to expect a potential bounce back towards $ 70–$ 72 in the near term.

WTI ($ 65.38) has moved up slightly, and as long as it holds above support, we expect a rebound towards $ 68–$ 70 in the near term.

Gold ($ 3,342.80) has risen in line with our expectations and can climb further towards $ 3,400 in the near term.

Silver ($ 36.29) is holding above its immediate support, and as long as this level sustains, we expect a bounce back towards $ 37.0–$ 37.5 in the near term.

Copper ($ 5.0955) is retreating from resistance near $ 5.15. While below this level, it may decline further towards $ 5.05–$ 5.00 in the near term. Alternatively, a break above $ 5.15 would turn the price bullish towards $ 5.30–$ 5.50.

Natural Gas ($ 3.4190) initially broke below $ 3.40 and tested a low of $ 3.2930 before bouncing back to close at $ 3.4150 yesterday. It remains vulnerable to a further decline, and a sustained break below support would confirm bearishness towards $ 3.20–$ 3.00. Otherwise, while support holds, a bounce back towards $ 3.50–$ 3.60 is possible.

22:30 04:00 AU PMI
…Previous -23.5

9:00 14:30 EU Unemp
6.2 …Expectation 6.2 …Previous 6.2

12:15 17:45 US ADP Emp
…Expectation 105.0 …Previous 37.0

13:30 19:00 CA PMI
…Previous 46.1

DATA Yesterday

23:50 05:20 JP Tankan Manf Index
…Expectations 10 …Previous 12 …Actual 13

0:30 06:00 JP PMI
49.5 …Expectations 50.4 …Previous 49.4 …Actual 50.1

1:45 07:15 CN PMI
49.6 …Expectations 49.2 …Previous 48.3 …Actual 50.4

5:00 10:30 IN Manf PMI
58.2 …Expectations 58.4 …Previous 57.6 …Actual 58.4

7:30 13:00 CH PMI
40.1 …Expectations 44.2 …Previous 42.1 …Actual 49.6

8:00 13:30 EU PMI
…Expectations 49.4 …Previous 49.4 …Actual 49.5

8:30 14:00 UK PMI
47.1 …Expectations 47.7 …Previous 46.4 …Actual 47.7

9:00 14:30 EU Flash CPI (YoY)
2.1% …Expectations 2.0% …Previous 1.9% …Actual 2.0%

14:00 19:30 US Manf ISM
48.3 …Expectations 48.8 …Previous 48.5 …Actual 49.0