Softer US data releases last week have weighed on the Dollar Index, taking it lower. A break below 99.40, if seen, can drag it further towards 99 or lower in the medium term. That said, most currencies are looking strong against the US dollar. Euro is headed towards 1.16, while EURJPY looks headed towards 185/186. Yen and Yuan trade strong and can soon target 158 and 6.70 respectively. Aussie and Pound can target 0.7120 and 1.36/37 respectively. USDJPY could trade lower as long as the Dollar Index trades lower. EURINR has risen above 110.40 and can target 111 or higher in the near term. USDINR too can dip while below 95.50 and test 95.20.

Dollar Index (99.515) trades lower after a series of softer US economic data releases last week. The index may dip to 99.40, but a break below that, if seen, can be bearish towards 99 or lower in the coming days.

EURUSD (1.1581) is reaching towards 1.16, which is likely to act as immediate resistance. A break above 1.16 is unlikely in the near term, but if seen can signal medium-term bullishness towards 1.17/1.18, contrary to our current view of facing rejection at 1.16.

Dollar-Yen (159.08) has been pulled down by the dip in the Dollar Index. If the spot dips below 158.90, it can be dragged further down towards 158 before moving up in the medium term.

EURINR (110.7334) has broken above 110.30/40 and moved up. It can test 111 or higher in the coming sessions. Near-term view is bullish.

EURJPY (184.24) has risen above 184 and, if it sustains, can rise further towards 185/186 in the next few weeks. View is bullish above 184.

USDCNY (6.7407) continues to dip and could soon target 6.70 in the near term.

Aussie (0.7096) could test 0.71-0.7120 if it sustains the current rise, while Pound (1.3553) can rise to 1.36/37 while above 1.35.

USDINR (95.43) could dip towards 95.30/20 today as most other currencies trade strongly against the US Dollar.

The US Treasury Yields have bounced back well from their support zone. That keeps intact our bullish view. The yields can rise more. The German Yields have risen back sharply. The chances of the dip to test their support have reduced. A further rise from here will indicate the resumption of the uptrend and take them higher. The 10Yr GoI is holding above its support. We expect the yield to break this support and fall. A narrow range is possible for some time before the expected fall in case the yield bounces from here.

The US 10Yr (4.68%) and 30Yr (5.25%) yields have risen back. The 4.65%-4.6% (10Yr) and 5.2%-5.15% (30Yr) support zone is holding well. That keeps the bullish view intact to see 4.8% (10Yr) and 5.35%-5.4% (30Yr).

The German 10Yr (3.2%) and 30Yr (3.7%) Yields have risen back sharply. The outlook remains bullish to see 3.3%-3.35% (10Yr) and 3.8% (30Yr) on the upside. Support is at 3.1% (10Yr) and 3.6% (30Yr).

The 10Yr GoI (6.7578%) is managing to hold above 6.75%. We expect a break below 6.75% and fall to 6.7% first and then to 6.6%. In case of a bounce from here can keep the yield in the 6.75%-6.8% for some time.

Global equities remain mixed. Dow is gradually weakening and can decline towards 53000 while the broader 53000-55000 range remains intact. DAX needs to sustain above 26500 to extend its rise towards 27000-27500. Nifty remains cautiously positive above 24300 and can recover towards 24500 or higher, while a break below 24300 would weaken the outlook. Nikkei remains bullish despite a slight correction and can rise towards 70000 and beyond. Shanghai faces resistance near 3950, with a break below this level keeping the downside towards 3875-3850 intact.

Dow (53730.19, -0.11%) is gradually sliding lower and can decline towards 53000 in the near term, while the broad range of 53000-55000 remains intact for some time.

DAX (26553.26, +0.20%) needs a sustained break above 26500 to rise further towards 27000-27500 in the near term.

Nifty (24,366.00, -0.12%) tested a low of 24296.80 and closed slightly higher for the week. It needs to remain above 24300 to keep the possibility of a bounce back towards 24500 or higher alive. Only a sustained break below 24300 could delay the expected rise.

Nikkei (68840.61, +0.18%) has seen a slight correction but can soon move higher towards 70000 and beyond.

Shanghai (3938.06, +0.28%) has bounced back but faces immediate resistance near 3950. While this resistance holds, the earlier mentioned decline towards 3875-3850 remains likely in the near term.

Crude prices likely to remain range-bound between $ 80-$ 95 for Brent and $ 75-$ 90 for WTI. Gold remains bullish above $ 4200 and can rise towards $ 4600 and higher on a break above $ 4500. Silver has bounced back and can advance towards $ 70-$ 75. Copper has recovered from $ 6.50 and can rise towards $ 6.80, with a sustained break above it opening the way towards $ 7.00. Natural Gas remains weak but could find support near $ 2.60 and bounce towards $ 2.75-$ 2.80.

Brent ($ 88.86) and WTI ($ 82.53) are likely to remain broadly range-bound between $ 80-$ 95 and $ 75-$ 90 respectively for some time.

Gold ($ 4451.99) bounced back to $ 4437 on Friday. While it remains above $ 4200, the possibility of a break above $ 4500 and a rise towards $ 4600 and higher remains intact.

Silver ($ 65.82) has bounced back in line with our expectations and can rise further towards $ 70-$ 75.

Copper ($ 6.71) has bounced back after testing a low of $ 6.50. It can move higher towards $ 6.80 and needs to sustain above this level to see a further rise towards $ 7.00.

Natural Gas ($ 2.66) has fallen contrary to our expectations and could find support near $ 2.60. If this support holds, a bounce back towards $ 2.75-$ 2.80 can be seen later.

23:50 05:20 JP GDP
…Expected 0.5% …Previous 0.5%

2:00 07:30 CN Retail Sales
…Expected 1.5 …Previous 1.0

2:00 07:30 CN IIP (YoY)
…Expected 5.0 …Previous 5.3

12:30 18:00 CA Inflation Y/Y
…Expected 2.5 % …Previous 2.8 %

20:00 01:30 US TICS (Net foreign purch of long-term Sec)
…Expected 151.4 $ Bln …Previous 232.7 $ Bln

Friday’S DATA:-

IN WPI
Expn 10.1 % …Expected 10.3 % …Previous 10.0 % …Actual 9.8 %

EU GDP
…Expected 0.4 % …Previous 0.0 % …Actual 0.4 %

EU Trade Bal
…Expected -2.2 EURbln …Previous -9.0 Eur bln …Actual 8.6 %

US Retail Sales (MoM)
Expn. 0.4 % …Expected 0.1 % …Previous 0.2 % …Actual -0.8 %