Escalating war scenarios in the middle east over the weekend has led to a surge in precious metals and Crude oil prices, weakening the dollar slightly. The DXY tested 98.09 initially but has dipped due to rising commodity prices. This has in turn led to a rise in the Euro which can test 1.18-1.1850 in the near term. EURINR can head towards 108-108.50 while EURJPY can test resistance at 185.35 before falling back towards 183 in the medium term. USDJPY has risen above 156 but weakness in the Dollar if seen can limit the upside for the pair. However, on the charts there is scope for 158 while above 156. USDCNY has moved back above 6.85 and needs to sustain for a rise back towards 6.90 and higher eventually.
The Aussie and Pound can rise towards 0.7150 and 1.36-1.3650 respectively.  USDINR is likely to open with a gap up today as offshore quotes at 91.20. However, immediate upside could be capped at 91.25/50.

EURUSD (1.1791) trades below 1.18 just now. Escalating tensions in the middle east have lead to rise in precious metals and Crude prices and indicate weakness for the Dollar Index (97.814) which has dipped from 98.094 seen early in the morning today. This could limit immediate downside for Euro and instead lead to a rise towards 1.18-1.1850 in the near term.

EURINR (107.6056) has tested 107.11 so far. The cross looks bullish towards 108-108.50.

EURJPY (184.25) opened near 183.27 but has risen from there. The pair has immediate resistance at 185-185.35 which is likely to hold and produce a decline back towards 183 in he coming sessions. Only a decisive break above 185.35, if seen can open higher targets of 186-188.

Dollar-Yen (156.27) has broken above 156. While the rise sustains, it can rally towards 158-160 on the upside in the medium term. But at the same time we need to see if any weakness in the Dollar itself can hold back a rise in the USDJPY.

USDCNY (6.8676) has risen, trading above 6.86 now. The pair will have to continue rising towards 6.90 and higher to avoid another decline below 6.85 and to rise hopes of a corrective upside recovery. We remain cautious while below 6.90.

Aussie (0.7095) tested 0.7035 but has moved up from there. While above 0.70, there is scope to test 0.7150/72 before pausing for a reversal.

Pound (1.3480) looks stable. A break above 1.35 is needed for a further rise towards 1.36/3650 in the medium term. The overall range of 1.34-1.3650 may continue to hold for now.

USDINR (90.98) closed below 91 on friday. But the offshore rate quotes 91.20 just now, indicating a possible gap up opening today on the Onshore rates. However for the very near term we may limit the upside to 91.25/50 which we have been staying in our daily editions for a long time now. Watch price for a reversal below 91.50.

The US Treasury yields remain lower. They have room to fall further from here before witnessing a reversal. The German yields are coming down towards their support as expected. The price action around their support will need a close watch to gauge the next direction of move. The 10Yr GoI is struggling to rise. That keeps it vulnerable for a near-term dip before seeing a rise.
The US 10Yr (3.97%) and 30Yr (4.64%) Treasury yields remain lower. They can test 3.95%-3.9% (10Yr) and 4.6% (30Yr) and then possibly reverse higher.

The German 10Yr (2.64%) and 30Yr (3.31%) yields are coming down towards 2.6% (10Yr) and 3.3%-3.28% (30Yr). The price action thereafter will need a close watch for a reversal.

The 10Yr GoI (6.6601%) is struggling to get a strong rise. That leaves it vulnerable to break 6.65% and see 6.6% first before rising back to 6.8%.

Dow has declined as expected and may extend the fall towards 48,250–48,000. DAX has slipped to the lower end of its 25,400–25,000 range but can hold between 24,800–25,400 as long as support near 24,800 remains intact. Nifty has fallen in line with expectations and can drift towards 25,000 in the near term. Nikkei has broken below 58,000 contrary to our view and may slide further towards 57,000–56,800. Shanghai continues to rise as anticipated and can head towards 4,185–4,200 in the coming sessions.

Dow (48,649, -0.72%) has fallen in line with our expectation. A further decline towards 48,250–48,000 looks likely in the near term.

DAX (24,965, -1.51%) has fallen to the lower end of the mentioned 25,400–25,000 range. As long as it holds above the immediate support near 24,800, a range of 24,800–25,400 can persist for some time.

Nifty (25,178.65, -1.25%) declined to a low of 25,141.30 in line with our expectation and can fall further towards 25,000 in the coming sessions.

Nikkei (57,990, -1.23%) has slipped below 58,000 and tested a low of 57,340, contrary to our expectation. A further fall towards 57,000–56,800 is possible in the near term.

Shanghai (4,153.88, -0.22%) is rising in line with our expectation and can move up towards the earlier mentioned levels of 4,185–4,200 in the coming sessions.

Crude prices have turned volatile as fresh clashes in the Middle East and fears of disruption through the Strait of Hormuz pushed oil prices sharply higher. Brent can bounce towards $ 80–$ 82 and WTI towards $ 72–$ 75 if tensions stay elevated. Gold remains strong and can extend the rise towards $ 5,400–$ 5,500. Silver can climb to $ 95–$ 100 in the coming weeks. Copper also looks steady with room to rise towards $ 6.10–$ 6.20. Natural Gas continues to look weak and may drift lower towards $ 2.80–$ 2.60 in the near term.

Brent ($ 76.29) has opened sharply higher with a gap up to $ 81.57 due to rising tensions in the Middle East, after Iranian officials hinted at a possible shutdown of the Strait of Hormuz, one of the most critical global oil transit routes. Reports of increased military activity in the region and fresh sanctions-related warnings from Western nations have added to supply disruption concerns. It has fallen off sharply to current levels, but due to the ongoing tension, a bounce back towards $ 80–$ 82 can be seen in the near term.

WTI ($ 69.73) opened higher at $ 75 due to geopolitical tensions in the Middle East but has declined sharply from there to current levels. Prices can bounce back towards $ 72–$ 75 if tensions escalate further.

Gold ($ 5,356.50) has risen above $ 5,300 in line with our expectation and can extend the rally towards $ 5,400–$ 5,500 in the near term.

Silver ($ 94.22) is moving up as expected and can rise towards $ 95–$ 100 in the coming weeks.

Copper ($ 6.04) can move higher towards $ 6.10–$ 6.20 in the near term.

Natural Gas ($ 2.8980) remains under pressure and is likely to fall towards $ 2.80–$ 2.60 in the near term.

GMT 12:00 IST 17:30 IN IIP
…Previous 7.8

DATA LAST FRIDAY
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GMT 0:01 IST 05:31 UK Cons Conf
…Expectations -15.0 …Previous -16.0 …Actual -19

GMT 8:00 IST 13:30 CH GDP
…Expectations 0.2 …Previous -0.4 …Actual 0.1

GMT 12:00 IST 17:30 IN GDP
…Previous 8.2% …Actual 7.8%

GMT 13:30 IST 19:00 US PPI
…Expectations 0.3 …Previous 0.4 …Actual 0.5

GMT 13:30 IST 19:00 US PPI ex Food & Energy (MoM)
…Expectations 0.3 …Previous 0.6 …Actual 0.8%

{GMT 13:30 IST 19:00 CA GDP
…Expectations 0.1 …Previous 0.0 …Actual 0.2%