The DXY has dipped below 97 but needs to rebound back immediately to rise towards 97.50/98. Euro has support at 1.1850 which is likely to hold and push the spot towards 1.1950-1.20. EURINR on the other hand could dip to 106.35 while below 108. EURJPY could gradually rise to 184/186 while above 181/180. USDJPY could rise towards 154/156 while above 153-152.25. USDCNY can rise to 6.92 while above 6.90, crucial support remains at 6.85. The Aussie can test 0.70/69 while below 0.7150 while the Pound needs to break past 1.37 to head toward 1.38+ levels, else can initially test 1.35. USDINR can trade within the 90.30-90.80/85 region for now.

Dollar Index (96.925) has dipped below 97 contrary to our expectations of seeing a rise towards 97.50/98. An immediate rebounce back to 97+ is needed for our expected upside. Else we may have to allow for a dip to 96.50.

EURUSD (1.1865) has immediate support at 1.1850 which is likely to hold and push the spot higher towards 1.1950-1.20 in the next few sessions.

EURINR (107.4264) could dip to 106.35 while below 108. Thereafter, we may expect a bounce back in the medium term back towards 108+.

EURJPY (181.56) could see a slow rise to 184/186 while above 181/180.

Dollar-Yen (153.05) could rise towards 154/156 while above 153-152.25.

USDCNY (6.9075) has scope to rise to 6.92 while above 6.90. Immediate downside could be limited to 6.85.

Aussie (0.7082) has scope to fall to 0.70 while below 0.7150.

Pound (1.3641) has immediate resistance at 1.37 below which the pair can trade within 1.37-1.1.35 range. A break above 1.37 is needed for the pair to rise towards 1.38.

USDINR (90.64) could trade within 90.30-90.80/85 for now. A break on either side will be needed for a test of 90.00 or 91 in the near term.

The US Treasury yields have declined further sharply, breaking below their key support. That opens the door for the yields to fall more from here. The US CPI data release on Friday triggered this sharp fall. The US Headline CPI came in at 2.39% (for January), down from 2.65% (December). The German yields have also come down further. The bias is negative to see more fall. The 10Yr GoI has risen back from its low of Friday. There is not much room to fall from here. We can expect the yield to rise back in the coming days.

The US 10Yr (4.05%) and 30Yr (4.69%) Treasury yields have declined sharply below 4.1% and 4.75% respectively. The yields can now go down to 4%-3.95% (10Yr) and 4.6%-4.55% (30Yr) from here. Need to see if the yields are reversing higher after that or not.

The German 10Yr (2.75%) and 30Yr (3.43%) yields have declined further. The bias is negative to see 2.7%-2.65% (10Yr) and 3.35% (30Yr) on the downside.

The 10Yr GoI (6.6799%) has risen back from the low of 6.6391%. Key supports are at 6.64% and 6.6%. While above 6.6%, the bias is positive to see rise back to 6.8%. Broadly, 6.6%-6.8% is the trading range for now.

Dow has declined as expected and is holding above key support near 49000, which can create a bounce towards 49800–50000. DAX remains capped below 25000 and looks vulnerable to a fall towards 24800–24500. Nifty has broken below 25500, and remains vulnerable for a decline towards 25200–25000. Nikkei continues to weaken in line with expectations and may head towards 56500–56200. Shanghai has dropped sharply and could test support near 4050 before attempting a rebound.

Dow (49650, +0.16%) fell to a low of 49155, in line with our expectation. Immediate support is near 49000, while it holds, a bounce towards 49800–50000 remains likely.

DAX (24979, +0.08%) is holding below 25000, and as long as it remains below this level, it stays vulnerable to a decline towards 24800–24500 in the near term.

Nifty (25471.10, -1.30%) has slipped below 25500, its 21-day moving average. The current decline may extend further towards 25200–25000 in the coming sessions.

Nikkei (56880.00, -1.30%) is declining in line with our expectation and may fall further towards 56500–56200 in the near term.

Shanghai (4082.07, -1.26%) has dropped sharply to a low of 4079, as expected. A further decline to test support near 4050 is possible in the near term before a bounce occurs.

Crude prices are likely to remain range-bound. Brent holding above $ 66 within $ 70–$ 66 and WTI above $ 62 within $ 66–$ 62. Gold has bounced but remains vulnerable below $ 5100 for a fall towards $ 4900–$ 4800. Silver can decline towards $ 70–$ 65. Copper continues to look weak towards $ 5.70–$ 5.65. Natural Gas has opened lower after closing higher, but as long as $ 3 holds, a bounce towards $ 3.2–$ 3.4 remains possible.

Brent ($ 67.71) can trade within the $ 70–$ 66 range for some time as long as it holds above $ 66.

WTI ($ 62.87) is holding above $ 62 and can continue to trade within the $ 66–$ 62 range for some time.

Gold ($ 5043.80) has bounced back, but while it remains below $ 5100, it is vulnerable to a decline towards $ 4900–$ 4800 in the near term.

Silver ($ 76.65) has risen, but our outlook remains intact for a fall towards $ 70–$ 65.

Copper ($ 5.7730) is likely to decline towards $ 5.70–$ 5.65 in the coming sessions.

Natural Gas ($ 3.00) closed at $ 3.24 on Friday but has opened today with a gap down at $ 3.05. While the immediate support near $ 3 holds, we retain our view of a bounce back towards $ 3.2–$ 3.4 in the near term.

GMT 23:50 IST 05:20 JP GDP
…Previous -0.6%

GMT 6:30 IST 12:00 IN WPI
…Previous 0.83

GMT 10:00 IST 15:30 EU Ind Prodn (MoM)
…Previous 0.7

GMT 10:00 IST 15:30 IN Trade bal
-25.8 …Expectations -25.0

GMT 13:30 IST 19:00 CA Inflation Y/Y
…Previous 2.4

DATA LAST FRIDAY
================
GMT 7:30 IST 13:00 CH CPI
…Expectations 0.0 …Previous 0.1 …Actual

GMT 13:30 IST 19:00 US CPI (MoM)
0.2 …Expectations 0.3 …Previous 0.3 …Actual 0.2

{GMT 13:30 IST 19:00 US Core CPI (MoM)
0.1 …Expectations 0.3 …Previous 0.2 …Actual 0.3