The Dollar Index can head towards 99-100 in the near term if it sustains above current levels. While EURUSD and EURINR continue to stay rangebound between 1.18–1.16 and 102.50/103-101.00. EURJPY will have to break 173 to strengthen to rise further, else it can trade within the 171-173 region for now. Dollar-Yen looks bullish towards 150–151. USDCNY can be vulnerable to fall towards 7.14 if breaks below 7.16 in the near term. Aussie and Pound can trade within 0.655-0.645 and 1.36-1.34/33 range respectively. USDINR has limited downside potential to 87.00-86.90. Eventually it is likely to bounce back towards 87.50 and higher. US New Home sales data release is scheduled today.

Dollar Index (97.944) fell sharply on Friday after the FED Chief Jerome Powell hinted at a policy rate cut in the Jackson Hole meeting. Currently it has recovered well from the low of 97.66 and if sustained, can head towards 99-100 in the coming sessions. Overall, the downside is expected to be limited to 97 for now.

EURUSD (1.1698) is holding below resistance coming at 1.1744. The range of 1.18-1.16/15 remains intact for now.

EURINR (102.2049) had risen as anticipated but now faces immediate resistance at 103, below which a range of 102.50/103-101.00 is likely to hold in the near term. 3 yesterday in line with expectations.

EURJPY (172.47) is stuck within the 171-173 region and a break on either side will be needed to get the further directional clarity.

Dollar-Yen (147.43) turned lower from 148.77 itself. Still, while above 146/45, the targets of 150-151 are kept alive for now.

USDCNY (7.1619) is slowly inching lower. Any break below 7.16 if seen can open the doors for 7.14 as well before halting. The upside looks limited to 7.18 for now.

Aussie (0.6479) tested our target of 0.6510 before coming down. Now, an immediate resistance can be seen coming at 0.655, below which a range of 0.655-0.640 can hold for some time.

Pound (1.3500) initially rose to the high of 1.3544 but could not sustain and started to decline. White the resistance at 1.36 holds, the pair can fall back towards 1.34/33 in the coming sessions.

USDINR (87.3630) can limit the downside to 87.00-86.90 and bounce back towards 87.50 and higher levels in the coming weeks.

The US Treasury yields fell sharply on Friday after Powell indicated possible rate cuts in his Jackson Hole speech. Failure to rise back immediately can drag the yields lower and will reduce the chances of the rise that we were expecting. The German yields have dipped. They remain vulnerable to break their immediate support and fall more. The 10Yr GoI is moving up as expected. But there is limited upside from here as the strong resistance that is ahead can cap the upside and drag it down again.

The US 10Yr (4.26%) and 30Yr (4.88%) Treasury came down sharply on Friday. Failure to bounce back from here can drag them down to 4.2% (10Yr) and 4.8% (30Yr) and even lower. It will also reduce the chances of the rise to 4.45%-5% (10Yr), 5.05%-5.1% (30Yr) that we were expecting.

The German 10Yr (2.72%) and 30Yr (3.31%) yields have dipped slightly and can test 2.7% (10Yr) and 3.25% (30Yr) in line with our expectation. Failure to bounce back from there can see an extended fall to 2.65% (10Yr) and 3.2% (30Yr).

The 10Yr GoI (6.5510%) is moving up towards 6.6% in line with our expectation. We repeat that 6.6% can cap the upside and drag the yield down towards 6.4% again. 6.4%-6.6% can be a possible range for some time before the yield falls much lower.

The Dow Jones rose sharply on Friday on signal of interest rate cut by Powell. There is scope for a rally to 46000-47000. Dax continues to trade within 24500-23500. Nifty saw profit taking on Friday and has remained well below 25200. But while above 24800, a possible rise can be seen today. Nikkei could decline towards 42000-41000 initially before rising to 44000-46000 over the medium term. Shanghai has rallied well and while the strong uptrend holds, it can soon test 4000, a strong resistance.

The Dow (45631.74, +1.89%) rose sharply on Friday as Powell signalled that interest rate cuts could be on the way at the Jackson hole speech. The rise has taken the index up, breaking above our expected 45450 and while that holds, there could be more scope for a rally towards 46000-47000.

DAX (24363.09, +0.29%) rose on Friday but continues to trade within the 24500-23500 region. A test of 24500 looks possible initially before facing rejection to decline towards the lower end of the range. A decisive break above 24500 would be needed for a rally to 25000-25500 in the medium term.

Nifty (24870.10, -0.85%) saw profit taking on Friday, unable to break above 25200. There could be fair chances of a possible rise today while above 24800. Else a dip back to 24600 could come into the picture.

Nikkei (42923.86, +0.68%) trades higher today but overall looks likely to fall towards 42000-41000 before an eventual bounce back is seen in the medium term.

Shanghai (3851.62, +0.68%) has surged well. Our initial target of 3800 has been achieved and now the price may target a crucial level of 4000. Note that 4000 is a very strong resistance where the index can pause its current rally.

Brent and WTI have risen as expected and can extend further towards $ 68–$ 69 and $ 64–$ 65 respectively before resuming their bearish trend. Gold and Silver have surged sharply, with Gold likely to test $ 3,450–$ 3,500 and Silver aiming for $ 39.50–$ 40.00 in the near term. Copper remains range-bound between $ 4.40 and $ 4.50, awaiting a breakout, while Natural Gas has tested crucial support near $ 2.6980; holding above this keeps the chances alive for a rise to $ 2.85–$ 2.90, but a break lower could drag it to $ 2.60–$ 2.50.

Brent ($ 67.77) has risen in line with our expectations and can move further higher towards $ 68–$ 69 in the near term before resuming its bearish trend.

WTI ($ 63.74) is also moving up and can extend the rise towards $ 64–$ 65 in the near term before turning lower again.

Gold ($ 3,409.50) has risen sharply in line with our expectations and tested a high of $ 3,423.40 on Friday. A further rise towards $ 3,450–$ 3,500 looks likely in the near term.

Silver ($ 38.88) surged as expected to test a high of $ 39.09 on Friday. It can now target $ 39.50–$ 40.00 in the coming weeks.

Copper ($ 4.4580) is likely to continue trading within the $ 4.40–$ 4.50 range until a breakout occurs on either side.

Natural Gas ($ 2.7620) has reversed sharply against our expectations to a low of $ 2.6980 on Friday, testing crucial support. As long as this support holds, the view of a rise towards $ 2.85–$ 2.90 remains intact. A break below this support would turn the outlook bearish, targeting $ 2.60–$ 2.50.

9:00 14:30 GER IFO Business Climate
86.8 …Previous 88.6

9:00 14:30 GER IFO Business Situations Index
86.2 …Previous 86.5

9:00 14:30 GER IFO Business Expectations Index
87.3 …Previous 90.7

14:00 19:30 US New Home Sales
621 …Previous 627

DATA LAST FRIDAY
===============

23:05 04:35 UK Cons Conf
…Expectation -19 …Previous -19 …Actual -17

23:30 05:00 JP CPI
2.9 …Expectation 3.0 …Previous 3.2 …Actual 3.0