Failed talks between Iran and US have reduced hopes of a possible pause to the existing conflicts between the two. However, this time the impact on currency movement seems to be lower as the prices have reacted not too sharply today morning. The Dollar Index has moved up above 99 while the Euro has dipped below 1.17. however, We keep a near term range of 98.50-99.50 and 1.16-1.1750 to hold on the two. USDJPY can continue to trade within 158-160.50 while EURJPY is depreciate towards 160/161 followed by a dip back towards 158/157 while EURJPY can face resistance anywhere between 186.50-188 region. EURINR has immediate resistance at 109.20 below which a test of 108 can be likely. Pound can test 1.3250 while below 1.35; but Aussie can remain ranged within 0.68-0.70/72 region for the near term. USDCNY may head towards 6.85/86 while above 6.8250. USDINR has scope to rise above 93 today. A broad 1rupee range of 92.50-93.50 can hold for the next few weeks.
Dollar Index (99.057) is holding below the resistance near 101 on the 3-day candles and has fair scope to eventually test 96 in the coming weeks, but needs confirmation of a break below 98. The index is holding above 98 for now and could range within 98-99.50 zone for sometime before eventually breaking lower towards 96.
We had expected EURUSD (1.1681) to limit it’s upside at 1.1750 last week, which seen to be working for now. Immediate range of 1.16-1.1750 may hold for now but later if the DXY breaks below 98, EURO can be headed towards 1.18-1.19 in the next few weeks.
EURINR (108.8332) is trading lower from interim resistance at 109.20. While that holds, we may see a dip to 108 for a short correction. Thereafter, a rise to 110-112 could be on the cards for the coming weeks.
EURJPY (186.58) has a few resistances in the 186.50 to 188 region and may possibly face rejection from anywhere in this region for a correction towards 182-180 in the longer run. Watch price action near 186-188 zone.
Dollar-Yen (159.68) could continue to trade within the near term range of 158-160.50 for the near term. Thereafter, while the crucial resistance of 160.50 holds, we may expect a dip below 158 towards 156 or lower.
USDCNY (6.8342) has risen well and while above 6.8250, we expect a rise to 6.85/86 in the coming days.
Aussie (0.7033) rose well last week from 0.6877 to 0.7095. It needs to break above 0.72 for it to pick up upside momentum; till then we may expect the broad trade zone of 0.72-0.68 to hold.
Pound (1.3401) has held below the immediate resistance at 1.35 and while that holds, it can dip towards 1.33/32 again. A decisive break past 1.35 is needed for any upside momentum to pick up towards 1.39.
USDINR (92.7325) is likely to move up today to levels above 93. However, we have scope for a test of 92 on the charts but may take some time to get there. For now 93.50 to 92.50 could hold as the trade range for the next few weeks.
The US Treasury Yields have risen sharply in the early Asian trades. A strong rise in Crude Oil price after the US-Iran peace talk failure has taken yields higher. On the charts, the supports are holding well, and the broader bullish view remains intact. The yields can rise more. The US CPI has risen sharply to 3.29% (YoY) in March from 2.43% in the previous month. The inflation can rise more as long as the oil price stays elevated. This is also positive for the yeilds. The German yields are getting a strong follow-through rise. That keeps intact our bullish view. There is room to rise more from here. The 10Yr GoI has come down after testing its intermediate resistance. This keeps the door open to see more fall from here before reversing higher again.
The US 10Yr (4.35%) and 30Yr (4.94%) Treasury yields have risen back very well. The support at 4.25%-4.2% (10Yr) and 4.8%-4.75% (30Yr) is holding well/ That keeps intact our bullish view to see 4.5%-4.6% (10Yr) and 5.05%-5.1% (30Yr).
The German 10Yr (3.05%) and 30Yr (3.58%) yields are getting a good follow-through rise. That keeps intact our bullish view. The yields can rise to 3.2% (10Yr) and 3.65% (30Yr).
The 10Yr GoI (6.9119%) failed to breach 7% and has come down. This keeps the downside open to see 6.85%-6.8% first.
Global equities have opened under pressure following the collapse of U.S.-Iran peace talks. Dow and DAX witnessing gap-down openings, though both retain upside potential while key support levels at 47000 and 23000 hold respectively. Nifty is also expected to open sharply lower and may decline further towards 23500-23300 while below 24000. Nikkei maintains its bullish outlook for a rise towards 57000-57500. Shanghai needs a sustained break above 4000 to extend gains towards 4025-4050 in the coming sessions.
Dow (47738, -0.81%) has opened with a gap down at 47674 following the collapse of U.S.-Iran peace talks. Immediate support is near 47000, and if this holds, we retain our view of a rise towards 49000-50000 in the coming weeks.
DAX (23698, -1.41%) has opened lower due to the failure of the peace agreement between the U.S. and Iran. While it holds above 23000, the chances of a bounce back towards 25000 remain intact.
Nifty (24,050.60, +1.16%) is expected to open with a gap down near 23800-23700 today due to the failure of peace talks between the U.S. and Iran. While below 24000, a decline towards 23500-23300 can be seen in the near term.
Nikkei (56520, -1.51%) remains intact for a rise towards 57000-57500 in the near term.
Shanghai (3979.25, -0.17%) needs a sustained break above 4000 to see the earlier mentioned rise towards 4025-4050 in the coming sessions.
Brent and WTI have surged sharply above $ 100 amid escalating geopolitical tensions and supply disruption concerns, keeping the outlook bullish towards $ 110-$ 115 in the near term. Gold has corrected slightly but remains bullish while above $ 4600 with upside towards $ 4900-$ 5000. Silver also retains positive momentum for a rise towards $ 80-$ 85. Copper continues to strengthen in line with expectations and may extend gains towards $ 6.15-$ 6.25. Natural Gas remains weak and can decline further towards $ 2.65-$ 2.60 in the coming sessions.
Brent ($ 101.91) has surged above $ 100 after Trump announced that the U.S. Navy would begin blockading the Strait of Hormuz with immediate effect, preventing ships from entering or leaving and interdicting vessels that had paid tolls to Iran. A further rise towards $ 110-$ 115 can be seen in the near term.
WTI ($ 104.34) has bounced back above $ 100 after talks between the U.S. and Iran failed. A further upside towards $ 110-$ 115 can be seen in the near term.
Gold ($ 4742.80) has fallen back in line with our expectations. While above $ 4600, our earlier mentioned rise towards $ 4900-$ 5000 remains likely in the near term.
Silver ($ 74.52) has dipped, but the view remains intact for a rise towards $ 80-$ 85 in the near term.
Copper ($ 5.8135) has risen in line with our expectation and tested a high of $ 5.9360 on Friday. A further rise towards $ 6.15-$ 6.25 can take place in the near term.
Natural Gas ($ 2.6850) remains weak and can extend the decline towards $ 2.65-$ 2.60 in the coming sessions.
GMT 12:00 IST 17:30 IN CPI
3.42 …Previous 3.21
GMT 14:00 IST 19:30 US Existing Home Sales
4068 …Previous 4090
DATA YESTERDAY
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GMT 1:30 IST 07:00 CN CPI
…Market 1.2 …Previous 1.3 …Actual 1.0
GMT 1:30 IST 07:00 CN PPI
…Market 0.5 …Previous -0.9 …Actual 0.5
GMT 12:30 IST 18:00 US CPI
0.8 …Market 1.0 …Previous 0.3
GMT 12:30 IST 18:00 US Core CPI
0.1 …Market 0.3 …Previous 0.2
{GMT 12:30 IST 18:00 CA Labour Force
…Market 12.60 …Previous -83.9