The Dollar Index could fall toward 97–96 if it fails to hold 98 and rise past 99. EURUSD has risen past 1.17 and if sustained, can test 1.18 or even 1.19 as well. Only a break below 1.16 can bring back the lower targets of 1.15/14 into picture. EURINR is headed towards the resistance coming between 103.00-103.50 region. EURJPY can target 178 or even 180 while it trades above 175-174. USDJPY needs to see a bounce from 150, else it can get dragged towards 148 as well. USDCNY continues to consolidate between 7.14-7.12. While the Aussie is trading near the lower end of its 0.660-0.645. The Pound can rise towards 1.35-1.36 levels, while it sustains above 1.34. USDINR is trading at 88 on the NDF. While above 87.70, a further rise to 88.25 and above looks possible.

Dollar Index (98.264) continues to decline, and failure to break above 99 soon could extend the fall toward 97–96. A breach below 98 would confirm this downside move. Price action around current levels remains critical, while the previous upside targets of 100–101 are on hold for now.

EURUSD (1.1704) rose to 1.1711, defying earlier expectations of staying below 1.17. If the rise holds above 1.17, it could extend to 1.18–1.19. Immediate support lies at 1.16, break below this would be needed to open the way to 1.15–1.14 and negate the rise to 1.18 and higher.

EURINR (102.9290) has moved up in line with our view and can soon test the resistance coming between 103.00-103.50 region. Thereafter, whether the resistance holds or extend the rise further will have to be seen.

EURJPY (175.85) initially rose to the high of 176.46 before coming down. The cross has a scope to bounce back towards 178 or even 180, as long as it stays above the supports coming between 175-174 levels.

Dollar-Yen (150.24) is holding above 150 but needs to rise past current levels to sustain momentum. Else a break below 150 could drag it down to deeper support at 148. Rise to 153-154 is kep on hold until further clarity.

USDCNY (7.1235) is expected to continue consolidating within a narrow range of 7.14-7.12 and a broader range of 7.15-7.12 for some time.

Aussie (0.6469) is coming off within its 0.660-0.645 range amid speculation of a near-term rate cut by the Reserve Bank of Australia. A near term support is coming at 0.64 which can limit the downside for now.

Pound (1.3444) is rising gradually as expected and if sustained above 1.34, can test 1.35-1.36 in the coming days.

USDINR (87.9830) observed the low of 87.6875 but quickly recovered as well. While it sustains above 87.70, we maintain our view of a rise towards 88.25 and above in the near term. Alternatively, a sustained break below 87.70 would turn the outlook bearish, targeting 87.50 or even 87.00, though this currently looks less likely.

The US Treasury yields have declined sharply. The fall is happening in line with our expectations. The yields can fall more from here. The German yields remain lower and stable. Failure to rise back immediately can drag them lower. The 10Yr GoI has bounced back. But a strong follow-through rise is needed from here to go further higher and avoid a fall back.

The US 10Yr (3.96%) and 30Yr (4.57%) Treasury yields have declined sharply. Our view of seeing a fall to 3.9%-3.85% (10Yr) and 4.55%-4.5% (30Yr) remains intact. Thereafter the yields can rise back again.

The German 10Yr (2.57%) and 30Yr (3.16%) yields remain lower and stable. Failure to rise back above 2.6% (10Yr) and 3.2% (30Yr) immediately can drag them down to 2.5% (10Yr) and 3.07% (30Yr).

The 10Yr GoI (6.50%) has bounced back. But a strong follow-through rise above 6.5% needed to go back up to 6.55% and higher. Else the fall to 6.45%-6.4% cannot be ruled out.

The Dow fell sharply below 46000 amid concerns over bad loans at regional banks and could weaken further towards 45000 if it fails to recover. DAX remains stable above 24000, likely to trade within 23600-24500 in the near term. Nifty has broken above the crucial 25500 level, and sustained trade above it could signal a fresh bullish breakout. Nikkei looks positive and may move towards 49000 while holding above 48000. Shanghai is likely to remain range-bound between 4000-3800/3750, with a break above 4000 needed to confirm medium-term bullishness.

The Dow (45952.24, -0.65%) fell sharply to close below 46000.  Bad loan crisis at some regional banks seems to be concerning as per news sources. Unless the index bounces back above 46000 and higher, it could be vulnerable to fall towards 45000.

DAX (24272.19, +0.38%) is trading above 24000 but could have scope to trade within 23600-24500 in the near term.

Nifty (25585.30, +1.03%) has finally managed to break and close above the crucial 25500 level. The index needs to sustain this rise to indicate fresh upside breakout which could be bullish in the coming sessions.

Nikkei (48116.45, -0.33%) could slowly head towards 49000 while above 48000. Near term view looks bullish.

Shanghai (3912.74, -0.089%) could trade in the 4000-3800/3750 region for the near term with 4000 being crucial resistance. A decisive break above 4000, if seen would assure fresh bullishness in the medium term. Else the index can eventually decline after seeing some sessions of ranged movement with the mentioned levels. 

Crude prices fallen sharply after the EIA report showed an unexpected rise in US crude inventories and record-high production. Brent could decline further towards $ 60, while WTI may extend its fall towards $ 56 in the near term. Gold remains bullish after testing a new high near $ 4347, with potential to rise towards $ 4400 or even $ 4500-4600 if momentum continues. Silver faces strong resistance near $ 53.77 and could see a sharp reversal towards $ 50-48 if it holds. Copper remains range-bound between $ 4.9-5.2, while Natural Gas is holding support at $ 2.9 and could rebound towards $ 3.0-3.1 unless it breaks lower towards $ 2.8-2.7.

Brent ($ 60.67) has fallen sharply as the weekly EIA report showed an unexpected increase in crude inventories and a rise in US crude production to a record high. A further decline towards $ 60 can be seen in the near term.

WTI ($ 56.60) has fallen sharply to a low of $ 57.26, in line with our expectation, and can now decline further towards $ 56 in the near term.

Gold ($ 4341.50) remains bullish and tested a fresh all-time high of $ 4346.70 yesterday. A further rise towards $ 4400 is possible in the near term. If $ 4400 breaks, the rally could extend towards $ 4500-4600. Otherwise, a short corrective dip may occur before the uptrend continues.

Silver ($ 52.88) has risen as expected and tested a high of $ 53.62 yesterday. A crucial multi-decade resistance lies near $ 53.77, which is an important level to watch. If it holds, a sharp reversal could follow, with prices possibly plunging towards $ 50-48 in the coming weeks.

Copper ($ 4.9565) remains range-bound between $ 4.9-5.2 for now, awaiting a breakout on either side.

Natural Gas ($ 2.9130) tested support at $ 2.9 yesterday and while this support holds, it can bounce back towards $ 3.0-3.1 in the near term. Alternatively, a failure to sustain above this level could drag it further down towards $ 2.8-2.7.

GMT 9:00 IST 14:30 EU CPI (YoY)
2.5 …Previous 2.0

GMT 12:30 IST 18:00 US Housing Starts
1316 …Previous 1307

GMT 13:15 IST 18:45 US Industrial Production
0.1 …Previous 0.1

GMT 13:15 IST 18:45 US Capacity Utilization
77.0 …Previous 77.4

GMT 13:00 IST 01:30 US TICS (Net foreign purch of long-term Se
…Previous 49.2

DATA YESTERDAY
===============

GMT 1:30 IST 07:00 Australia Labour Force
…Expectations 14.9 …Previous -11.9 …Actual 14.9

GMT 6:00 IST 11:30 UK Trade Bal GBP (Bln)
…Expectations -22.0 …Previous -22.2 …Actual -21.2

GMT 12:30 IST 18:00 US PPI
0.0 …Expectations 0.3 …Previous -0.1 …Actual

GMT 12:30 IST 18:00 US PPI ex Food & Energy (MoM)
…Expectations 0.3 …Previous -0.1 …Actual

GMT 12:30 IST 18:00 US Retail Sales (MoM)
1.1 …Expectations 0.4 …Previous 0.6 …Actual

{GMT 12:30 IST 18:00 US Philifed Index
…Expectations 9.1 …Previous 23.2 …Actual