Strong US Retail Sales and the taking over of Kevin Warsh as the new FED chair. Has boosted the Dollar Index for a sharp rise beyond 98.60 and led the Euro to decline below 1.17, contrary to our expectations. USDJPY has also rallied well and could head towards 159-160.50 soon, while the Aussie and Pound have declined well and are headed towards 0.71 and 1.3250, respectively. The EURJPY can trade within the 183.80-185.50 region, while the EURINR may test support at 111.50/35. USDCNY has recovered a bit but is bearish while below 6.80. USDINR may test the crucial resistance region of 95.90-96-96.30 before facing rejection that can take the price down towards 95.50-95.

Dollar Index (99.048) rose sharply, breaking above 98.60, contrary to our expectation of seeing a decline to 97/96. The rise came in after a strong US Retail sales release yesterday and on the expectation of a tighter monetary policy as Kevin Warsh takes over as FED chairperson. Overall, while the index trades above 99-99.35, there is scope for a rise to 100-101 again in the medium term.

EURUSD (1.1645) has held well below 1.18 and has declined sharply, contrary to our expectation of a rise to 1.18/1.19. While below 1.18, the view is bearish towards 1.16 and lower.

EURINR (111.6827) needs to bounce from immediate support near 111.50/35 to rise back towards 112-112.50 region else, a break below 111.50 would trigger a decline towards 110.50. may dip towards 111.50 while below 112.50.

EURJPY (184.67) may trade within the 183.80-185.50 region for the near term. Thereafter, a breakout on either side will pave the way for further movement.

Dollar-Yen (158.54) has regained upside momentum on a break above 158, contrary to our expectation of facing rejection. The strength in the Dollar Index is supportive of a rise in the USDJPY and can open chances of testing 159-160.50 again while above 158.

USDCNY (6.7965) has moved up on Dollar strength but unless a decisive break above 6.80 is seen, view continues to remain bearish towards 6.78/75.

Aussie (0.7185) has dipped as expected and could be headed towards 0.7120-0.7100. Thereafter, a break below 0.71 is needed for further decline towards 0.70.

Pound (1.3365) has fallen sharply below 1.3450 and resumed decline towards 1.3250.

USDINR (95.7530) could face rejection from resistance near 96-96.30 region, which could lead to a decline towards 95.50-95.00 soon.

The US Treasury Yields have risen back sharply. The expected rise is happening without seeing the intermediate dip that was mentioned yesterday. The German yields have come down sharply. They are oscillating in a sideways range now. A bullish breakout and a rise is expected to happen eventually. The 10Yr GoI is struggling to breach the intermediate resistance. That keeps alive the chances of seeing a dip first before resuming the broader upmove.

The US 10Yr (4.52%) and 30Yr (5.06%) Treasury yields have risen back sharply. The rise to 4.55%-4.6% (10Yr) and 5.15%-5.2% (30Yr) is happening straightaway without seeing the dip to 4.4% (10Yr) and 4.95% (30Yr).

The German 10Yr (3.04%) and 30Yr (3.58%) yields have come down sharply. For now, they are range bound between 2.9%-3.15% (10Yr) and 3.5%-3.65% (30Yr). We expect to see a bullish breakout of this range and a rise to 3.3% (10Yr) and 3.7% (30Yr) eventually.

The 10Yr GoI (7.0203) is struggling to rise past 7.05%. The broader bias is positive to breach 7.05% and rise to 7.1%-7.15%. But the possibility of a dip to 6.95%-6.9% is also there before the rise happens. Wait and watch.

Dow is attempting to break above 50000, which could trigger a rise towards 51000, but otherwise the broader 50000-49000 range may continue. DAX has corrected sharply after testing 24595 but could find support near 24000, keeping the 24000-25000 range intact. Nifty has turned stronger than expected and can rise towards 24000 while holding above 23,300. Nikkei is attempting to break below 62000, and a sustained break lower could drag it towards 61500-61000, else the 62000-64000 range may continue. Shanghai continues to weaken in line with expectations and can decline further towards 4100-4050.

Dow (50022, -0.26%) surged to a high of 50292 yesterday and is attempting to break higher above 50000, which could take it further up towards 51000. However, while 50000 holds, our earlier mentioned 50000-49000 range could continue for some time.

DAX (24195, -1.26%) rose to a high of 24595 yesterday in line with our expectations. It has fallen back sharply today but could find support near 24000. A range of 24000-25000 could hold for some time while 24000 remains intact.

Nifty (23,689.60, +1.18%) moved above 23500, contrary to our expectations. While it sustains above 23,300, the rise can extend towards 24,000 over the next week.

Nikkei (61990, -1.70%) has fallen back sharply and is attempting to break below 62000. A sustained break below this level could drag it down towards 61500-61000. Otherwise, the earlier mentioned 62000-64000 range can continue.

Shanghai (4152.65, -0.60%) has fallen in line with our expectations and tested a low of 4129 today. A further decline towards 4100-4050 can be seen.

Brent and WTI have dipped slightly but can still move higher within their broader $ 95-$ 115 and $ 90-$ 110 ranges respectively. Gold has weakened after failing to break above $ 4800 and may decline further towards $ 4500. Silver has also turned weaker after failing near $ 90 and can fall towards $ 80-$ 75 in the near term. Copper has corrected sharply due to concerns over slowing Chinese demand and may decline further towards $ 6.20-$ 6.00. Natural Gas continues to trade within the broader $ 2.50-$ 3 range while remaining below the key $ 3 resistance.

Brent ($ 107.20) has dipped but can still test the upper end of the mentioned $ 95-$ 115 range in the near term.

WTI ($ 98.45) has dipped but can rise within the mentioned $ 90-$ 110 range.

Gold ($ 4619.30) is falling as it failed to break above $ 4800 and could decline further towards $ 4500.

Silver ($ 81.51) has pulled back sharply after failing to break past $ 90. A further decline towards $ 80-$ 75 can be seen in the near term.

Copper ($ 6.41) has fallen sharply by nearly 3% today due to concerns over a slowdown in Chinese demand. A further fall towards $ 6.20-$ 6.00 can be seen in the near term.

Natural Gas ($ 2.94) can trade within a broad range of $ 2.50-$ 3 while remaining below $ 3.

GMT 9:30 IST 15:00 IN Trade bal
…Previous -20.67

GMT 13:15 IST 18:45 US Ind Production
-0.91 …Market 0.20 …Previous -0.49

GMT 13:15 IST 18:45 US Cap Utilization
75.11 …Market 75.80 …Previous 75.70

DATA YESTERDAY
==============
GMT 6:00 IST 11:30 UK Trade Bal
-24.33 …Market -20.10 …Previous -22.80 …Actual -27.22

GMT 6:00 IST 11:30 UK GDP
…Market 0.6 …Previous 0.1 …Actual 0.2

GMT 6:30 IST 12:00 IN WPI
4.68 …Market 4.40 …Previous 3.88 …Actual 8.30

GMT 12:30 IST 18:00 US Retail Sales (MoM)
0.5 …Market 0.6 …Previous 1.9