The U.S. announced a reduction in tariffs on Indian goods from 25% to 18%, while the Dollar Index strengthened on a better than expected Manufacturing ISM at 52.6. DXY now faces resistance near 98.00-98.50, which can cap the upside and keep it range-bound between 96.00–98.50. EURUSD has declined as expected; support near the 1.18 MA needs to hold for a rebound. EURINR have declined due to Rupee strength. Immediate support near 106.00-105.50 can get tested if the fall continues. URJPY can remain within the 182–186 range, while USDJPY, below 156, may test 154-153. USDCNY can drift toward 6.90, the Aussie may trade within 0.69-0.71. While Pound can attempt to bounce towards 1.38 if it sustained above 1.36. USDINR has fallen sharply on the trade deal news. Immediate support is coming around 90 which can get tested soon. US ADP Employment data release is scheduled today.

Stronger US ISM at 52.6 led Dollar Index (97.463) to extend the rise to 97.73 before declining a bit. Now, immediate resistance is seen between 98.00-98.50 region and while it holds, a broad range of 98.50-96.00 can hold in the near term.

EURUSD (1.1809) tested 1.1775 before rebounding. As long as the moving average support near 1.18 holds, the pair can attempt a bounce towards 1.19 and higher. A decisive break below 1.18 would negate the bullish bias and open the way for a move towards 1.17-1.16 in the near term. Watch price action closely around current levels.

EURINR (106.6221) came down sharply due to Rupee strength. Now, immediate support is seen between 106.00-105.50 which can get tested in the near term.

EURJPY (183.49) can rise within the 182-184/186 range which is expected to hold for some time before a breakout is seen on either side.

Dollar-Yen (155.42) tested 155.79 before declining. If the fall continues, a test to 154-153 can happen in the coming sessions.

USDCNY (6.9389) has slipped below 6.94 and can gradually decline towards 6.90 or slightly lower in the near term.

Aussie (0.6959) is holding the 0.69-0.71 quite well for now and while it remains above 0.69, a further rise within the range looks possible.

Pound (1.3672) has interim support near 1.36, and while it holds, the pair can attempt a rebound towards 1.38. A break below 1.36 would be needed to turn the near-term outlook more bearish.

USDINR (90.2610) is trading near the 90.25 region on the NDF after the announcement that the U.S. will lower tariffs on Indian goods from 25% to 18% following a new trade deal with India. An immediate support is seen near 90. We will have to monitor the price action closely to see whether it holds or not.

The US Treasury yields are moving up within their range in line with our expectation. Our bias is positive to see a bullish breakout of this range eventually if not immediately. The German Yields are moving up. Further rise from here is needed to ease the danger of falling back. We will have to wait and see. The 10Yr GoI has surged above its resistance. Higher borrowing plan announced in the Budget on Sunday has triggered this rise. There is room for the 10Yr GoI to move further higher from here.

The US 10Yr (4.27%) and 30Yr (4.91%) Treasury yields are going up within their 4.2%-4.3%/4.35% (10Yr) and 4.8%-4.95% (30Yr) range in line with our expectation. We retain our positive bias to see a bullish breakout of this range.

The German 10Yr (2.87%) and 30Yr (3.51%) yields are moving up. Need to see if they can sustain and go further up to 2.95% (10Yr) and 3.6% (30Yr). Only then the danger of the fall to 2.75%-2.7% (10Yr) and 2.35% (30Yr) will ease.

The 10Yr GoI (6.7662%) has risen well above 6.75% without seeing the near-term dip mentioned yesterday. Now, while above the 6.7%-6.65% support zone, the 10Yr has potential to target 6.95%-7% over the medium term.

The Dow and the DAX trade higher and look bullish towards 50000/52000 and 25000/25500 respectively. The overnight announcement of US-India trade deal and lower tariffs of both countries on each others goods could rise optimism in the Asian indices. The agreement of India to stop buying Russian oil and to potentially buy US and Venezuela oil has led to a trade deal In favor of India with reduced tariffs. Nikkei is already up sharply by 2.5% and could test 54000-55000. The posiitve trade deal could lead to a rally in Nifty today. Near term target of 26000-26500 is still in place while above 25000. Shanghai has broken below 4050 but if it does not bounce back immediately, it has scope to test 3980-3950 before pausing for a reversal.

The Dow(49407.66, +1.05%) has gained back yesterday after a brief decline seen in the previous session. Overall view is bullish towards 50000/52000 while above support at 48500.

DAX (24797.52, +1.05%) is rising as expected and can head towards 24800-25000. A break past 25000 will take the index further up to 25500.

Nifty (25088.40, +1.06%) recovered yesterday after the decline seen on Sunday post the Budget statement. The overnight announcement of US-India trade deal is positive for the stocks and we may see a significant rally in the index today. A near term rise towards 26000-26500 is on the cards while above 25000.

Nikkei (53987.66, +2.53%) has surged. It could test 54000-55000 sooner than expected.

Shanghai (4015.75, -2.48%) continues to decline on sharply lower new Home sales data for Jan-26, that showed a 27% decline compared to the same period last year. Having broken below 4050, unless an immediate bounce back is seen in the next 1-2 sessions, the index can tank towards 3980-3950 before pausing.

Brent and WTI have fallen as expected on easing Middle East tensions, with downside seen towards $ 64 and $ 60. Gold and Silver have bounced from key supports near $ 4400 and $ 70, keeping the upside open towards higher levels. Copper may test support near $ 5.40 before a possible rebound. Natural Gas holds near $ 3.20, above which a bounce is possible, else further downside cannot be ruled out.

Brent ($ 65.76) has fallen in line with our expectation amid easing geopolitical risks in the Middle East. A further fall towards $ 64 can be seen in the near term.

WTI ($ 61.67) has declined as expected. A further fall towards $ 60 can be seen in the coming sessions.

Gold ($ 4787.80) as mentioned earlier, plunged to test support near $ 4400 and closed higher at $ 4652.40. While this support holds, a bounce back towards $ 4900-$ 5000 can be seen.

Silver ($ 81.49) has tested a low of $ 71.20 and closed higher at $ 77.01 yesterday. Immediate support is coming near $ 70 and while this holds, a bounce back towards $ 84-$ 86 remains likely.

Copper ($ 5.8620) has tested a low of $ 5.56 as expected. It can test support near $ 5.40 and if this holds, a bounce back towards $ 6.00-$ 6.20 remains likely.

Natural Gas ($ 3.2280) contrary to our expectation, has broken below $ 3.50 and tested a low of $ 3.1550 yesterday. Immediate support is coming near $ 3.20 and while this holds, a bounce back towards $ 3.40-$ 3.60 can be seen. Else, a break below this can drag it further down towards $ 3.00-$ 2.80.

GMT 3:30 IST 09:00 RBA Meeting
…Expectations 3.9 …Previous 3.6

DATA LAST FRIDAY
================
GMT 0:30 IST 06:00 JP PMI
…Expectations 51.5 …Previous 50.0 …Actual 51.5

GMT 1:45 IST 07:15 CN PMI
…Expectations 50.1 …Previous 50.1 …Actual 50.3

GMT 5:00 IST 10:30 IN Manufacturing PMI
…Expectations 56.8 …Previous 55.0 …Actual 55.4

GMT 8:30 IST 14:00 CH PMI
…Expectations 47.2 …Previous 45.8 …Actual 48.8

GMT 9:00 IST 14:30 EU PMI
…Expectations 49.4 …Previous 48.8 …Actual 49.5

GMT 9:30 IST 15:00 UK PMI
…Expectations 51.6 …Previous 50.6 …Actual 51.8

GMT 14:30 IST 20:00 CA PMI
…Previous 48.6 …Actual 50.4

GMT 15:00 IST 20:30 US Manufacturing ISM
… 48.4 …Expectations 48.5 …Previous 47.9 …Actual 52.6