Major currency pairs briefly broke key levels before reversing, leaving the near-term trend unclear. We will need to wait for clearer price action to confirm the next move. DXY fell after Trump downplayed the dollar’s decline. It needs to hold above 96 to rebound towards 98, else risks slipping to 94. Watch out for the FOMC meeting today wherein the FED is expected to keep the interest rates unchanged at 3.75%. EURUSD and EURINR have cooled and can drift lower towards 1.18 and 108 while below 1.20 and 110. EURJPY and USDJPY can recover while above 182 and 152. USDCNY may ease towards 6.90, Aussie could pull back to 0.68 below 0.70, Pound upside looks capped near 1.38–1.40, and USDINR needs a break below 91.50 to target 91.25–91.00. India’s IIP data is due today.

Dollar Index (97.023) extended the losses further after the Donald Trump said he wasn’t worried about its recent decline. DXY initially fell to 95.81 before rebounding. While the DXY sustains above 96, it can attempt to rise back towards 98 and above. Only a confirmed break below 96 if seen could shift the focus towards 94 and lower levels. A better clarity could be expected after the FOMC scheduled today.

EURUSD (1.1991) tested our target of 1.20 and even surpassed it to the high of 1.2082 before coming down. A sustained move above 1.20 will be needed to make the outlook further bullish. Else, while below 1.20, a pullback towards 1.18 can occur in the medium term.

EURINR (109.7502) rose to 110.32 before coming down. While the resistance around 110 region holds, a pullback towards 108 can happen in the coming sessions.

EURJPY (183.39) can move within the broad 182-186 range while it trades above the support of 182.

Dollar-Yen (152.94) tested the support near 152 before recovering from there. While it holds, a bounce back toward 156 can happen in the near term.

USDCNY (6.9472) has slipped below 6.95 and if sustained, can extend the fall towards 6.90 or slightly lower.

Aussie (0.6990) rose to a high of 0.7022, slightly above our 0.70 target before easing. While below 0.70, a corrective dip towards 0.68 is likely. Only a sustained break above 0.70 would shift focus to 0.72.

Pound (1.3494) has risen as expected but faces immediate resistance at 1.38 and higher at 1.40 which can cap the upside for now.

USDINR (91.47) remained below 92 yesterday. On the NDF it is trading below 91.50, and if it opens lower onshore, 91.25-91.00 levels could come into focus.

The US Treasury yields remain lower but stable. There is not much room on the downside. We expect the immediate support to hold and trigger a bounce. Broadly, the bias is positive. We will have to wait and see if the Fed meeting outcome tonight is giving the trigger for the expected bounce. The German yield remains stable. They look vulnerable to fall rather than getting an extended rise. We will have to wait and watch. The 10Yr GoI is attempting to bounce. Bias is positive, and there is room to rise more.

The US 10Yr (4.23%) and 30Yr (4.84%) Treasury yield remains lower but stable. While above 4.2% (10Yr) and 4.8% (30Yr), the bias is positive. We can expect the yields to bounce back and rise to 4.35% (10Yr) and 5% (30Yr) eventually.

The German 10Yr (2.87%) and 30Yr (3.49%) yields remain stable. They continue to remain vulnerable to fall back to 2.75%-2.7% (10Yr) and 2.35% (30Yr) rather than rising to 2.9%-2.95% (10Yr) and 3.6% (30Yr).

The 10Yr GoI (6.6732%) continues to oscillate around 6.65% and is attempting to rise. Bias remains positive to see 6.7%-6.75%. Thereafter the yields can possibly turn down again.

The Dow and DAX have dipped ahead of the FOMC policy decision tonight. Dow can rise while above support near 48500-48000 while DAX can trade lower while below resistance near 25000. Nifty has risen after the India-EU trade agreement. But a decisive break above 25500/600 is needed for medium term bullishness. Nikkei could rise towards 54000/55000 while above 52000/53000. Shanghai can rise towards 4200.

The Dow(49003.41, -0.83%)  has dipped ahead of the FOMC policy rate decision due today. Support is seen near 48500-48000 region above which the index can rise slowly in the coming sessions.

DAX (24894.44, -0.15%) tested 25020 before coming off to close lower yesterday. A brief trade within 24500-25000 is possible before eventually rising higher towards 25500.

Nifty (25175.40, +0.51%) rose slightly yesterday after the India-EU final trade agreement. Near term trade between 25000-25600 is expected to hold.

Nikkei (53022.10, -0.58%) could rise to face resistance near 55000 and decline back to 53000-52000 region in the medium term.

Shanghai (4148.36, +0.20%) is holding steady above 4100 and could rise towards 4200.

Crude prices have strengthened, supported by geopolitical concerns, with Brent eyeing $ 69–$ 71 and WTI targeting $ 64–$ 66. Gold remains strong after testing $ 5190 and can extend gains towards $ 5250–$ 5300 on a break above $ 5200. Silver stays bullish above $ 100 with upside towards $ 120–$ 125. Copper remains under pressure below $ 6.10, keeping the downside open towards $ 5.70. Natural Gas continues to stay weak with scope to fall further towards $ 3.60–$ 3.40.

Brent ($ 67.58) has bounced back sharply to a high of $ 67.78 yesterday amid concerns over possible US military action against Iran, which could disrupt oil supplies from OPEC’s fourth-largest producer. A further rise towards $ 69–$ 71 can be seen in the near term.

WTI ($ 62.45) has moved to the upper end of the mentioned range. While it holds above $ 62, it can rise further towards $ 64–$ 66 in the near term.

Gold ($ 5198.30) has surged to a high of $ 5190 yesterday, in line with our expectation. A sustained break above $ 5200 can take it higher towards $ 5250–$ 5300 in the coming sessions.

Silver ($ 113.17) has bounced back to a high of $ 114.43, in line with our expectation. While it holds above $ 100, a further rise towards $ 120–$ 125 can be seen in the near term.

Copper ($ 5.9195) fell to a low of $ 5.80 yesterday, as expected. It has bounced back today and opened higher at $ 5.9645 but is easing off. While it holds below $ 6.10, the bias remains for a further decline towards $ 5.70 in the near term.

Natural Gas ($ 3.77) remains weak and can decline further towards $ 3.60–$ 3.40 in the near term.

NO MAJOR DATA RELEASES TODAY.

DATA YESTERDAY
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GMT 09:00 IST 14:30 German IFO Bus climate
…Expectations 88.3 …Previous 87.6 …Actual 87.6

GMT 09:00 IST 14:30 German IFO Bus situation …Previous 85.6 …Actual

GMT 09:00 IST 14:30 German IFO Bus expn
…Previous 89.7 …Actual

GMT 13:30 IST 19:00 US Durable Goods orders
…Expectations 3.1 …Previous -2.2 …Actual 5.3