The Dollar Index fell sharply after comments from President Trump that there is great progress on talks of de-escalation with Iran. The index can have scope to test 97/96 before bouncing back higher. Euro holds above 1.17 and can rise to 1.18-1.1850 while the EURJPY and USDJPY have fallen too and can test 182 and 157/156 respectively. USDCNY has fallen too but needs to sustain above 6.80 else can head towards 6.78/75 region. Pound has risen above 1.36 and can head towards 1.37 if it sustains.  Aussie can test 0.73 or higher in the near term while trading well above 0.72. USDINR tested 94.56, breaking below our expected low of 94.80 yesterday. Further dip looks possible today to 94.25-94.00.

Dollar Index (97.956) has dipped slightly below 98 contrary to our expectations of seeing a rade within 99-98 region. If the price sustains below 98, it can target lower levels of 97/96 in the near term. Else a bounce back above 98 will take it back towards 99.

EURUSD (1.1757) is trading higher on weaker dollar index. We may look for a slow rise to 1.18-1.1850.

EURINR (111.1921)   did bounce back above 111 but it would be crucial to see if it can sustain the rise or fall bcak lower towards 110. View is bullish to 112 while above 111.

EURJPY (183.58) has fallen below 183. Such a fall below 184 opens door for a further decline to 182. In the medium term, failure to bounce back from 182 can make it vulnerable to fall towards 180.

Dollar-Yen (156.11) fell to levels below 157 and could have scope to fall towards 156 or even lower before bouncing back from there to 157.

USDCNY (6.8077) fell below 6.82 and has fallen sharply. Failure to sustain above 6.80 will open up chances of a decisive decline towards 6.78/75.

Aussie (0.7245)    has been trading above 0.72 and it can target 0.73+ levels in the medium term.

Pound (1.3605)   has risen above 1.36. A decisive break past 1.36, if seen, will open upside chances of rising towards 1.37/38 soon. 

USDINR (94.6150) dipped to levels below our expected 95-94.80 mentioned yesterday. If the dip sustains, we may expect a fall to 94.25-94.00 before any bounce back is seen later.

The US Treasury Yields have come down sharply. News on US-Iran nearing a deal to end the war has dragged the oil price lower. The Treasury yields have also come down on the back of it. The yields have room to fall further from here to test their support. After that they can reverse higher and resume the upmove. The German yields have also come down sharply. But supports are there to limit the downside and keep the broader uptrend intact. The 10Yr GoI has declined sharply. It has room to dip further before reversing higher again.

The US 10Yr (4.34%) and 30Yr (4.93%) Treasury yields have come down sharply. The support at 4.3%-4.25% (10Yr) and 4.9%-4.85% can limit the downside. While above this support zone, there is no danger for the bullish view of seeing 4.5%-4.6% (10Yr) and 5.15%-5.2% (30Yr).

The German 10Yr (3%) and 30Yr (3.5%) yields have come down slightly. As expected, a test of 3%-2.95% (10Yr) and 3.5%-3.45% (30Yr) is happening first before the upmove resumes to target 3.3% (10Yr) and 3.7% (30Yr).

The 10Yr GoI (6.9219%) has come down sharply below 7%. A test of 6.9%-6.85% can be seen first. Thereafter the yield can rise back towards 7% and higher again.

Global equities have turned strongly bullish as easing Middle East tensions continue to support sentiment. Dow is testing 50000 and can rise towards 51000-51500 on a sustained breakout. DAX may extend gains towards 25500-26000. Nifty is moving higher towards 24500, and a break above it can open further upside towards 25500-26000. Nikkei remains strongly positive with upside towards 63500-64000. Shanghai continues to strengthen and may rise towards 4200 in the near term.

Dow (50087, +0.11%) has risen sharply due to improving Middle East talks and is currently testing 50000. A sustained break above this level would take the index higher towards 51000-51500, while failure to break past it would bring back the earlier mentioned 50000-49000 range.

DAX (25047, -0.02%) surged to a high of 25252 yesterday after reports of easing tensions in the Middle East. It has opened near 25000 today and can rise further towards 25500-26000 in the near term.

Nifty (24,330.95, +1.24%) has risen in line with our expectations due to easing Middle East tensions and can move higher to test 24500. If 24500 holds, our earlier mentioned 24500-23500 range may continue for some time. Else, a break above it would take the index higher towards 25500-26000.

Nikkei (62830.20, +1.11%) has risen sharply as expected yesterday. A further up move towards 63500-64000 is expected.

Shanghai (4166.2, +0.15%) remains likely to rise towards 4200 in the near term.

Commodity markets remain volatile amid improving Middle East peace talks. Brent and WTI have corrected sharply and may decline further towards $ 90-$ 85 and $ 85-$ 80 respectively if key supports break. In contrast, precious metals have strengthened, with Gold likely to rise towards $ 4800-$ 4900 while above $ 4500 and Silver towards $ 80-$ 85 while above $ 70. Copper remains strongly bullish and can rise towards $ 6.25-$ 6.30. Natural Gas is likely to stay range bound within the $ 2.80-$ 2.55 zone for now.

Brent ($ 101.79) has plunged to a low of $ 96.75 after Axios reported that the US believes it is close to an agreement with Iran to end the nearly 10-week war. It is currently trading near $ 100 but can fall back towards $ 95, and a break below this level would be needed for a further decline towards $ 90-$ 85.

WTI ($ 95.70) has fallen sharply to a low of $ 88.66 amid improving peace talks in the Middle East. Today it is trading higher near $ 95 but can retest $ 90, and a break below this level would drag it further down towards $ 85-$ 80.

Gold ($ 4713.30) has bounced back contrary to our expectations amid optimism surrounding Middle East peace talks. A further rise towards $ 4800-$ 4900 can be seen while above $ 4500.

Silver ($ 78.50) has bounced back contrary to our expectations and can move further up towards $ 80-$ 85 while above $ 70.

Copper ($ 6.19) rose to test our expected levels near $ 6.20 yesterday and can continue to move higher towards $ 6.25-$ 6.30 in the coming sessions.

Natural Gas ($ 2.7150) is falling and can trade within a $ 2.80-$ 2.55 range for some time.

GMT 0:30 IST 06:00 AU Trade Balance
…Market 4.45 …Previous 5.69

GMT 9:00 IST 14:30 EU Retail Sales
…Market -0.30 …Previous -0.19

DATA YESTERDAY
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GMT 22:30 IST 04:00 AU PMI
…Previous -27.9

GMT 5:00 IST 10:30 IN Services PMI
…Market 57.90 …Previous 57.50

GMT 12:15 IST 17:45 US ADP Emp
…Market 90.00 …Previous 62.00