The Dollar Index has recovered slightly while, the Euro has fallen from 1.17550. With the markets awaiting cues of possible rate hikes ahead for the year from the central bank meetings this week ahead (FOMC tomorrow and ECB day after) the currencies could remain stable. The Dollar Index and Euro can trade within 97.50-99 and 1.1650- 1.18 respectively, while the EURINR is likely to remain within 110-112. EURJPY and USDJPY can trade within 186-187.50 and 158-160.50 region while USDCNY has scope to test 6.855 while above 6.81. Pound and Aussie are likely to trade within 1.3430-1.36 and 0.7250-0.71 region with the USDINR trading just below crucial resistance near 94.30/50.

Dollar Index (98.541) seems to be recovering slightly. A sustained rise above 98.50 is needed in the near term to prevent any fall towards 97 or lower and ensure a bounce back towards 99-100 in the longer run. For now, the 97.50-99 region is likely to remain intact ahead of the FOMC tomorrow.

EURUSD (1.1714) tested 1.17550 before coming off from there. A re-test of 1.1755-1.18 can be possible while above 1.1650/70. Overall a broad range of 1.1650-1.1850 might hold for the next couple of weeks.

EURINR (110.381) has dipped slightly but, while it holds above 110, there is scope for a rise to 111-112 soon.

EURJPY (186.82) tested 187.10 yesterday in line with our expectations of a rise to 187.50. While above 186.25, the direction for the cross pair might remain higher. A broad 186-187.50 region may hold for the rest of the week.

Dollar-Yen (159.47) is likely to remain within the 157.50-160.50 region unless we see a clear decisive breakout on either side of this range.

USDCNY (6.8282) has risen slightly and can test 6.855 while it remains above 6.81. Interim resistance is seen near 6.8380.

Aussie (0.7185) has moved up and can head towards 0.72-0.7250 before again facing rejection from there back towards support near 0.71.

Pound (1.3528) has dipped slightly today. Overall, while above 1.3430, the view is bullish for a rise to 1.3575/36. It would be interesting to see if the price faces sharp rejection from 1.36.

USDINR (94.19) remained below the mentioned resistance near 94.35 yesterday. As long as this holds, we can see a pullback towards 93.75-93.50 in the near term. Alternatively, a sustained break above 94.35 would turn the pair further bullish towards the 95+ level, but this looks less likely for now.

The US Treasury Yields have risen sharply on the back of sharp rise in crude prices and ahead of the central bank policy meetings this week. With the FOMC tomorrow and the ECB on Thursday, we may expect the yields to rise this week followed by a possible decline later. The US 10Yr and 30Yr yield are trading at crucial resistance levels which need to hold for a decline; else sharp upside breakout looks possible. The German yields have moved up well and are up for some more rise in the next few sessions. Markets expect ECB and BOE meetings this week to open up avenue for rate hikes later -% may hold for the near term.

The US 10Yr (4.344%) and 30Yr (4.95%) Treasury yields have risen ahead of the US FOMC tomorrow where the rates are expected to be kept steady. If the 10yr and the 30yr yield breaks above the immediate resistance at 4.35% and 4.95% respectively, they can head towards 4.37/40% and 4.97% respectively. But we need to be cautious to see if the resistances can instead hold and take the yields lower or not.

The German 10Yr (3.039%) and 30Yr (3.5798%) yields have moved up sharply contrary to our expectations of seeing a dip initially. This has been triggered by a sharp rise in Brent prices back to levels above $ 105 leading to market sentiment of higher inflation risks which might lead to possible rate hikes from the ECB. The 10Yr and 30Yr yields may now be headed towards 3.2% and 3.60/65% respectively in the coming sessions.

The 10Yr GoI (6.9418%) failed to sustain rise above 6.95% and test 7%. Instead, it rose briefly in the morning session yesterday but closed below 6.95%. However, the yield may manage to bounce again today and rise towards 7-7.05% with near term downside limited to 6.855%.

Dow can decline towards 49000-48500 while below 50000, and DAX may test 24000 while below 24500. Nifty has turned positive after sustaining above 24000 and can rise towards 24400-24600. Nikkei remains strong above 60000 with upside towards 61000-62000. Shanghai has recovered slightly but while below 4115, downside towards 4000 remains likely.

Dow (49381, +0.08%) can decline towards 49000-48500 in the near term while below 50000.

DAX (24251, +0.12%) can fall to test 24000 in the near term while below 24500.

Nifty (24,092.70, +0.81%) has moved sharply higher above 24000 and sustained to close above it. While it holds above this level, the rally may extend towards 24400-24600 over the coming week.

Nikkei (60285, +0.07%) is trading above 60000 and while above this level, it can move higher towards 61000-62000.

Shanghai (4082.52, -0.08%) has risen, but while below 4115, our earlier mentioned fall towards 4000 remains likely in the near term.

Crude prices remain firm with Brent likely to rise towards $ 115 and WTI towards $ 100 in the near term. Precious metals remain under pressure for now, with Gold vulnerable towards $ 4600 and Silver towards $ 70 before a possible bounce back. Copper is moving sideways and may stay range bound between $ 6.00-$ 5.80. Natural Gas is also likely to remain within the $ 2.80-$ 2.55 range for some time.

Brent ($ 109.38) has risen in line with our expectations and can rise further towards $ 115 in the near term.

WTI ($ 97.41) is moving up and can test $ 100 in the near term.

Gold ($ 4686.70) is falling and can decline towards $ 4600 in the coming sessions before a bounce back is seen.

Silver ($ 74.70) can decline towards $ 70 in the near term, from where a bounce back can be seen.

Copper ($ 6.00) is moving sideways and can trade within a range of $ 6.00-$ 5.80 for some time.

Natural Gas ($ 2.72) can trade within a $ 2.80-$ 2.55 range for some time.

GMT 23:30 IST 23:30 JP Unemp
…Market 2.6 …Previous 2.60

GMT 3:00 IST 08:30 BOJ Meeting
…Market 0.75 …Previous 0.75

GMT 12:00 IST 17:30 IN IIP
…Market 4.2 …Previous 5.2

GMT 13:00 IST 18:30 US Case Schiller
0.60 …Market 1.0 …Previous 1.20

GMT 14:00 IST 19:30 US Cons Conf
85.15 …Market 89.4 …Previous 91.80

DATA YESTERDAY
==============
GMT 23:01 IST 04:31 UK Cons Conf
-23.8 …Market -25 …Previous -21 …Actual -25.0

GMT 23:30 IST 05:00 JP CPI
1.32 …Market 1.7 …Previous 1.26 …Actual 1.44

GMT 9:00 IST 14:30 GER IFO Business Climate
85.7 …Market 84.8 …Previous 86.4 …Actual 84.4

GMT 9:00 IST 14:30 GER IFO Business Situations
86.1 …Market 85.5 …Previous 86.7 …Actual 85.4

GMT 9:00 IST 14:30 GER IFO Business Expectations
85.0 …Market 83.9 …Previous 85.9 …Actual 83.3