USDJPY has broken above 162.85 to trade at all time highs since 1986. It can target 164.50-165 if the rise sustains, pulling EURJPY towards 187/188 on a break above 186. However, markets remain cautious for any intervention from the BOJ to reduce the pace of currency weakness. Dollar Index has broken above 101 and can rise towards 101.50-102, supported by US-Iran tensions and higher crude prices. EURUSD can dip towards 1.1350, while EURINR may test 109.50 before bouncing. USDCNY can trade within 6.76-6.7850 while Aussie may dip to 0.6950 and Pound can test 1.34-1.3450. USDINR may dip to 96-95.85 while below 96.50. The markets expect the ECB to keep rates unchanged and maintain a cautious stance tomorrow. However, 2 more rate cuts are expected, the first one possibly in September if crude prices continue to rise from current levels.

Dollar Index (101.18) has broken above 101 as the US-Iran tensions intensify and crude prices continue to rise, which seems to be the crucial factor driving the markets at the moment. The dollar Index can slowly rise towards 101.50-102 in the coming days, which can lead to an eventual dip in the EURUSD (1.14) towards 1.1350. The markets expect the ECB to keep rates unchanged and maintain a cautious stance tomorrow. However, 2 more rate cuts are expected, the first one possibly in September if crude prices continue to rise from current levels.

EURINR (109.8375) has dipped as expected. A test of 109.50 looks possible before a bounce is seen from there, targeting 110.50-111 in the medium term.

Dollar-Yen (163.17) has risen above the 162.85 level, rising sharply above 163. If the rise sustains, we may expect a slow rise to 164.50-165 in the coming days before the pair faces a rejection.

EURJPY (186.03) has risen to test resistance at 186. If the USDJPY continues to rise, it can pull up EURJPY too towards 187/188 in the near term. Failure to break above 186 can take it back towards 184/183.

USDCNY (6.7692) has moved up, holding above 6.76. The pair can rise to 6.78/7850 in the next few sessions. A near-term range of 6.76-6.7850 can hold.

Aussie (0.70) looks stable while Pound (1.3381) has declined from levels seen yesterday. Aussie has scope to dip to 0.6950 while Pound can attempt to test 1.34-1.3450.

USDINR (96.24) has been sustaining below 96.50 over the last few sessions. A slow dip to 96-95.85 still looks possible before the upside momentum regains strength for the medium term.

The US Treasury Yields are continuing to move up. They have risen above their intermediate resistance. While this sustains, there is room to rise more from here. The German yields continue to move up and can rise further. The ECB meeting outcome tomorrow will need a close watch The 10Yr GoI remains lower. It has to sustain above its immediate support to keep alive the chances of seeing one more leg of rise. Else, it can resume the fall from here itself. We will have to wait and watch.

The US 10Yr (4.63%) and 30Yr (5.14%) yields are continuing to move up. While above 4.6% (10Yr) and 5.1% (30Yr), the yields can rise to 4.7%-4.8% (10Yr) and 5.2% or even 5.35%-5.4% (30Yr).

The German 10Yr (3.16%) and 30Yr (3.66%) Yields have inched up. The rise to 3.2% (10Yr) and 3.75% (30Yr) is happening as expected.

The 10Yr GoI (6.7784%) remains lower. It has to sustain above 6.75% to keep alive the chances of seeing 6.85% on the upside. Else, a fall to 6.7% and 6.6% can happen from here itself. We will have to wait and watch.

Global equities have improved after recent weakness. Dow and DAX continue to hold within their broader ranges of 52000-53000 and 24700-25500 respectively. Nifty remains above the key 24000 support and can rise towards 24600 in the near term. Nikkei has rebounded sharply and needs a break above 68000 to extend its rally towards 70000-72000, while failure to do so could lead to a pullback towards 66000-65000. Shanghai has turned stronger after bouncing from 3750 and can rise further towards 3900-3950.

Dow (52433.44, -0.02%) has held above 52000 and bounced back. Our earlier mentioned range of 52000-53000 remains intact for now. However, with the ongoing tensions in the Middle East, the possibility of a break below 52000 cannot be ruled out.

DAX (25170.67, +0.31%) has bounced back from the previously mentioned support. While this support holds, the broad range of 24700-25500 is likely to remain intact for some time.

Nifty (24,187.70, -0.21%) closed lower but remains above the key support at 24000. It could open with a gap up near 24300-24400 and eventually move towards our earlier mentioned target of 24600 in the near term.

Nikkei (67495.77, +0.39%) has rebounded sharply above 67000, contrary to our expectations, due to a strong technical rebound in semiconductor and AI-related stocks following the recent tech sell-off, supported further by overnight gains on Wall Street and a weaker yen. Immediate resistance is seen near 68000. If this level holds, a pullback towards 66000-65000 can be seen. Otherwise, a break above it would trigger further bullishness towards 70000-72000.

Shanghai (3878.13, +0.37%) did not decline towards our earlier mentioned target of 3700 and instead bounced back from around 3750. The index is moving up gradually, and a further rise towards 3900-3950 can be seen in the near term.

Brent and WTI can rise further towards $ 95 and $ 90 respectively. Gold has strengthened above $ 4100 and can test $ 4200, while the broader $ 4000-$ 4200 range remains intact. Silver is likely to remain range-bound between $ 55 and $ 65 while support at $ 55 holds. Copper has rallied sharply on supply concerns and can extend its gains towards $ 6.60-$ 6.70. Natural Gas has recovered and is likely to trade within the $ 2.80-$ 3.00 range for some time.

Brent ($ 91.90) and WTI ($ 85.06) are moving higher in line with our expectations and can rise further towards $ 95 and $ 90 respectively in the near term.

Gold ($ 4131.45) has risen above $ 4100 in line with our expectations and can move towards $ 4200. While below $ 4200, a broad range of $ 4000-$ 4200 could hold for some time.

Silver ($ 60.03) has bounced back and can continue to trade within the broad $ 55-$ 65 range for some time, while support at $ 55 holds.

Copper ($ 6.53) has surged to our expected levels on supply concerns. A further rise towards $ 6.60-$ 6.70 can be seen.

Natural Gas ($ 2.8920) has bounced back, and a narrow range of $ 2.80-$ 3.00 could be seen for some time.

6:00 11:30 UK Unemp
…Expected 4.9% …Previous 4.9 %

DATA YESTERDAY:-
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CA Inflation Y/Y
…Expected 2.90 % …Previous 3.23 % …Actual 2.80%