Fresh strikes between the US and Iran once again seem to gain dominance, overall impacting the price movements. However, the Dollar Index and Euro are expected to remain in a range for the near term between 100.40-101.40 and 1.1370-1.1470 region, with some chances of the Dollar Index rising to 102 and the Euro testing 1.1350 or lower. The Yen is overall in depreciating mode, targeting 163/165 which could push EURJPY to 186 initially and further towards 187/188. USDCNY could fall towards 6.78 while below 6.81. USDINR has risen back sharply above 95.50, and while the rise sustains, it can test 95.75-96.00, which could lead the EURINR to rise further towards 110 given the Euro may remain ranged. Aussie and Pound struggle to rise above 0.70 and 1.34, and hence could remain range-bound within the 0.69-0.70 and 1.33-1.34 region for the very near term.

Dollar Index (101.025) has been trading within the 100.40-101.40 region, which may continue for a few more sessions. And keep EURUSD (1.1419) within 1.1370-1.1470 with a mild possibility of testing 1.1350 or lower in the medium term if the Dollar Index strengthens further towards 102. Tensions between US and Iran once again seem to be coming on the limelight to dominate near-term price movements.

Dollar-Yen (162.53) is steadily headed towards 163/165, which could eventually take EURJPY (185.64) towards 186 initially, and higher towards 187/188 in the medium term.

USDCNY (6.7983) tested 6.8031 but fell back from there. While below 6.81, the pair can fall towards 6.78.

Aussie (0.6929) and Pound (1.3392) are struggling to rise above 0.70 and 1.34, respectively and look range-bound for the very near term between the 0.69-0.70 and 1.33-1.34 region till a clear decisive breakout is seen.

USDINR (95.55) briefly broke below 95 earlier this week but moved back sharply to close above 95.50 yesterday after the news headlines were hit by fresh strikes between US and Iran. While above 95.50, we are bullish for a rise to 95.75-96 in the near term. That said, with a ranged Euro and a bullish USDINR, EURINR (109.1429) could be headed towards 109.50-110 in the coming sessions. Only a dip in the USDINR can bring the cross pair down towards 108.50-108, given the Euro could remain stable for the next few sessions.

The US Treasury and the German Yields have risen sharply. A strong rise in the oil price has pushed the yields higher. Both the US and the German yields can rise more from here. The 10Yr GoI has risen above its intermediate resistance contrary to our expectation. It can rise further to test its next resistance and possibly can turn down from there.

The US 10Yr (4.58%) and 30Yr (5.08%) yields have moved up further. A rise above 4.6% can take the 10Yr higher to 4.7%-4.8% going forward. The 30Yr has room to test 5.15% from here.

The German 10Yr (3.09%) and 30Yr (3.64%) have risen further and are gaining momentum. The yields can rise to 3.15%-3.2% (10Yr) and 3.75% (30Yr) from here.

The 10Yr GoI (6.7636%) has risen above 6.75% contrary to our expectation. It can test 6.8% and then possibly turn down again. A rise above 6.8% will only negate the danger of the fall to 6.5%-6.4%.

Global equities remain under pressure as renewed Middle East tensions continue to weigh on market sentiment. Dow and DAX can decline further towards 52000-51800 and 24800-24500 respectively. Nifty remains weak below 24000 and is vulnerable to a fall towards 23600-23500. Nikkei also remains bearish and can decline towards 66000-65000. Shanghai continues to weaken and can fall further towards 3925-3900.

Dow (52675.66, +0.10%) fell sharply to a low of 52343 yesterday in line with our expectations after President Trump said the ceasefire with Iran is over. A further decline towards 52000-51800 can be seen in the near term.

DAX (25179.44, +0.76%) plunged to a low of 24958 in line with our expectations. The support near 25000 needs to hold to prevent a further decline towards 24800-24500 and trigger a bounce back towards 25500.

Nifty (23,882.05, -2.12%) declined sharply towards 23800, contrary to our expectations. While it remains below 24000, the risk of a further decline towards 23600-23500 remains high in the coming weeks.

Nikkei (68175.89, +0.46%) saw a sharp fall to 65515, contrary to our expectations, before recovering to close near 67865 yesterday. It remains vulnerable to a further decline towards 66000-65000.

Shanghai (3953.86, -0.43%) has fallen in line with our expectations and can decline further towards 3925-3900 in the near term.

Crude prices have surged sharply on renewed Middle East tensions and rising fears of supply disruptions. Brent and WTI can rise further towards $ 85-$ 90 and $ 80-$ 85 respectively. Gold remains weak and can test the key $ 4000 support, while Silver remains vulnerable to a decline towards $ 55. Copper has turned weak amid heightened geopolitical tensions and can fall further towards $ 5.85-$ 5.75. Natural Gas is likely to continue trading within the broader $ 3.00-$ 3.50 range.

Brent ($ 78.30) surged to a high of $ 80.09 yesterday after the US launched strikes on more than 80 targets in Iran in response to Iran’s attacks on commercial shipping in the Strait of Hormuz. President Trump also stated that the ceasefire with Iran is over, raising concerns of renewed hostilities in the region that could disrupt energy supplies. A further rise towards $ 85-$ 90 can be seen in the near term.

WTI ($ 74.09) bounced back sharply to a high of $ 76.08 in line with our expectations. With renewed tensions in the Middle East, a further rise towards $ 80-$ 85 can be seen in the coming sessions.

Gold ($ 4087.70) continues to weaken and can test $ 4000 in the coming sessions. If this level holds, a bounce back can be seen. Otherwise, a break below it could drag the price further down towards $ 3800-$ 3600.

Silver ($ 58.65) continues to weaken and remains vulnerable to a further decline towards $ 55 in the near term.

Copper ($ 6.14) fell sharply to a low of $ 6.04 yesterday, contrary to our expectations, amid renewed Middle East tensions. There is room for a further decline towards $ 5.85-$ 5.75 in the near term.

Natural Gas ($ 3.2170) can continue to trade within the broad $ 3.00-$ 3.50 range for some time.

GMT 1:30 IST 07:00 CN CPI (YoY)
…Market 1.1 …Previous 1.2 ….Actual 1.0

GMT 1:30 IST 07:00 CN PPI
…Market 4.2 …Previous 3.9 ….Actual 4.1

GMT 14:00 IST 19:30 US Existing Home Sales
4153 …Market 4200 …Previous 4170

DATA YESTERDAY
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NO MAJOR DATA WILL BE RELEASED TODAY.