Donald Trump announced a trade deal with Japan in which both countries agreed to a 15% tariff rate. The Dollar Index is gradually coming off within its 99-96 range. The downside is expected to be limited to 96. The Euro and EURINR are headed towards 1.18 and 101.50 respectively. EURJPY is trading near 172 and failing to see an immediate recovery above the current levels can drag it towards 170 initially. USDJPY can test the support near 146 soon. USDCNY is trading lower within its 7.20-7.16/15 range. The Aussie and Pound have immediate resistance at 0.66 and 1.35/36 respectively, thereby suggesting limited upside. USDINR observed the high of 86.4150 yesterday. A crucial resistance is coming at 86.50 which can be tested before eventually coming down. US Existing Home Sales data release scheduled today.

Dollar Index (97.419) has been coming off since the last 2-3 sessions. Even if the fall extends further, the downside can be limited to 97-96 max. Overall, a range of 99-96 can hold for some time before a break happens on the upside eventually.

EURUSD (1.1730) and EURINR (101.313) are heading towards 1.18 and 101.50 respectively. Watch price action closely as if the rise extends to 1.19 and 102, then our downside targets of 1.15 and 99 will have to be revised accordingly.

EURJPY (172.06) failed to see a rise past 173 and started coming off from 172.93 itself. Immediate support is coming around 170 which can be tested if the fall extends further. Only a rise past 173 can bring 175 into picture.

Dollar-Yen (146.514) is nearing the support at 146 which is likely to be tested soon. Thereafter, whether the fall extends to the deeper support at 144 or the pair bounces from 146 itself is uncertain at the moment. Wait and watch for now. .

USDCNY (7.1686) can test the support near 7.16 and broadly trade within the 7.20-7.16/15 region for some time.

Aussie (0.6563) and Pound (1.3529) faces immediate resistances at 0.66 and 1.36 respectively. While these resistances hold, both the pairs are likely to fall back towards 0.650-0.645 and 1.34 or lower.

USDINR (86.2740) extended the rise to 86.4150 before cooling down. Note that a crucial resistance is coming at 86.50 which is expected to hold and push the pair lower to 86.00-85.50 as well.

The US Treasury yields are at their support. They can rise back either from here itself or after a little more dip from here. The German yields have dipped below their support contrary to our expectation. Failure to rise back from here can drag them lower and will negate the rise that we have been expecting. The ECB meeting outcome tomorrow will need a close watch. The 10Yr GoI is bouncing back and keeps intact the narrow range.

The US 10Yr (4.35%) and 30Yr (4.92%) Treasury yields are at their key4.35% (10Yr) and 4.9% (30Yr) support. We expect the yields to reverse higher either from here itself or after an extended fall to 4.3% and 4.85%. That will keep our view intact to see 4.55%-4.6% (10Yr) and 5.15%-5.2% (30Yr) on the upside eventually.

The German 10Yr (2.59%) and 30Yr (3.11%) yields have below 2.6% (10Yr) and 3.15% (30Yr) support contrary to our expectation. Failure to rise back immediately can drag them down to 2.5% (10Yr) and 3.05%-3% (30Yr). That will negate our bullish view of seeing a rise to 2.8% (10Yr) and 3.3% (30Yr).

The 10Yr GoI (6.3613%) is bouncing back. That keeps the 6.35%-6.4% narrow range intact.

The Dow Jones has moved up and can test 45000 in the near term before facing a decline. The Dax fell sharply, unable to sustain above 24500. Now, if it fails to sustain trade above 24000, it can fall towards 23500-23000 in the coming days. Nifty has also fallen sharply, holding below the 25200-25250 resistance zone. Failure to hold above 25000 can drag it lower to 24800-24600 in the coming days. Nikkei is rising slowly and has scope to test 41000 initially before a rejection is seen. Shanghai has risen to test our expected 3600. A further rally can take it to 3650 before a pause is seen.

The Dow (44502.44, +0.40%) tested 44542 yesterday and has closed just above 44500. An initial rise to 45000 looks possible before declining to 44000 later. Overall, the 45000-44000 range continues to hold for now.

DAX (24041.90, -1.09%) has fallen sharply, unable to sustain the rise seen in the last couple of sessions as US-EU trade negotiations seems to have stalled ahead of the upcoming 1st Aug deadline. Failing to break and sustain above 24500, the Dax has fallen to test 24000. Failure to hold above 24000 could open chances of 23500-23000 on the downside.

Nifty (25060.90, -0.12%) has fallen sharply, holding well below the 25200-25250 resistance region. It would be crucial to see if the price holds above 25000; else can fall towards 24800-24600 in the coming days.

Nikkei (40780.92, +2.58%) is rising slowly as expected. As mentioned yesterday, there is scope for a test of 41000 initially, while above support near 39000. The broad range of 39000-41000 may hold for a few more weeks before a decisive breakout is seen on either side of this range.

Shanghai (3598.04, +0.46%) has rallied to almost test 3600. The rise in construction shares and power firms aided the rally after China announced to start construction on a $ 170billion hydropower dam in Tibet over the last weekend. A sustained rise can take it further towards 3650 before a pause is seen in the near term.

Crude prices have dipped as expected and remain weak unless they bounce above $ 69 (Brent) and $ 66 (WTI) respectively. Gold faces resistance at $ 3,450 with potential for a dip to $ 3,400–$ 3,350 before rallying to $ 3,500–$ 3,600. Silver remains strong and could head towards $ 40–$ 41. Copper is holding firm with scope to rise to $ 5.85–$ 5.90. Natural Gas is falling but could bounce from support at $ 3.20–$ 3.10.

Brent ($ 68.98) fell to a low of $ 68.12 in line with our expectations but has opened higher at $ 68.92 today. Our view remains bearish for now, with a potential fall towards $ 67–$ 65 in the near term unless there’s a sustained bounce above $ 69.

WTI ($ 65.73) also moved as expected, falling to a low of $ 64.82 yesterday. A further decline towards $ 64–$ 62 looks likely unless it manages to bounce back above $ 66.

Gold ($ 3,437.40) tested a high of $ 3,447.50, in line with our view. Immediate resistance is seen near $ 3,450, while this holds, a corrective dip to $ 3,400–$ 3,350 is possible before a breakout above $ 3,450 and a rally to $ 3,500–$ 3,600. Alternatively, it may break above the resistance right away and head towards $ 3,500–$ 3,600 directly.

Silver ($ 39.56) is rising sharply as expected and could extend the rally further towards $ 40–$ 41 in the near term.

Copper ($ 5.7605) tested a high of $ 5.7715 yesterday, in line with our outlook. The metal remains bullish and can rise further towards $ 5.85–$ 5.90 soon.

Natural Gas ($ 3.2540) continues to fall as anticipated and is approaching key support around $ 3.20–$ 3.10. While this holds, a bounce back remains possible.

14:00 19:30 US Existing Home Sales
3945 …Previous 4030

DATA Last Friday

23:30 05:00 JP CPI
3.7 …Expectation 3.3 …Previous 3.4 …Actual 3.23

12:30 18:00 US Housing Starts
1312 …Expectation 1290 …Previous 1256 …Actual 1327