The Dollar index looks bullish towards 101-101.50 that could drag Euro towards 1.14 or lower. The USDJPY and EURJPY continue to look bullish while EURINR can decline towards 109. Aussie looks bullish towards 0.72/73 while Pound is headed towards 1.33/32. The USDINR has fallen exactly as expected supported by dip in oil prices. Crucial level to watch now would be 95.50. A bounce could take it back to 96-96.50 else a break below would open up 95.
Dollar Index (100.612) has moved up further as expected. We retain our near term bullishness towards 101-101.50 while above support at the 100-99.75 region. That said, EURUSD (1.1441) is bearish towards 1.14 or even lower towards 1.13.
Dollar-Yen (157.58) looks stable today. Our view remains bullish for a rise to 160. EURJPY (180.30) is also looking bullish for an initial test of 182. Thereafter, a decisive break on the upside is needed to continue bullishness.
EURINR (109.3320) has dipped below 109.80 and is headed towards 109. Thereafter, a decisive break below 109, if seen will open up chances of further decline to 108.5-108.
USDCNY (6.6989) looks bearish for a fall to 6.69 while below 6.70.
Aussie (0.7111) has moved up as expected and looks bullish towards 0.72/0.73 in the medium term.
Pound (1.3329) could slowly decline towards 1.33 initially and then towards 1.32 on a decisive break below 1.33.
USDINR (95.5950) has dipped exactly as expected. It would be crucial to see if the spot reverses from 95.50 and heads back to higher levels or does it break below 95.50 to decline all the way back to 95.00. Watch price action at 95.50.
The US Treasury and the German Yields remain lower. They both have room to dip further from here to test their support. After this corrective fall both the German and the Treasury Yields can rise back and resume their broader uptrend. The 10Yr GoI has come down sharply and is poised above a crucial support. We expect this support to hold and the yield to rise back from here.
The US 10Yr (4.96%) and 30Yr (5.30%) yields remain lower but stable. A test of 4.85% (10Yr) and 5.2% (30Yr) looks possible first. Thereafter the uptrend can resume to target 5.1%-5.2% (10Yr) and 5.5% (30Yr) on the upside.
The German 10Yr (3.46%) and 30Yr (3.81%) Yields can test 3.43%-3.4% (10Yr) and 3.8% (30Yr). An extended dip to 3.35% (10Yr) and 3.75%-3.7% (30Yr) is also a possibility. A fresh rise thereafter can take the yields higher to 3.6% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.0106%) has come down sharply. We expect it to sustain above 7% and rise back to keep the chances alive of seeing 7.15%. A sustained break below 7% will negate this rise.
Dow remains vulnerable below 53000, with a break below 52000 opening 51500-51000. DAX is testing 26000, with a break above this level opening 26500. Nifty needs to hold 23300 for a move towards 23500. A break above 23500 would open 23800. Nikkei remains below 67000, while Shanghai is testing 3950 resistance.
Dow (52294, +0.03%) has retreated from a high of 52844 in line with our expectations. A break below 52000 would trigger a further decline towards 51500-51000. Only a sustained rise above 53000 would negate this downside risk.
DAX (25840, +0.19%) tested 25968 in line with our expectations. It remains to be seen whether it falls back or breaks above 26000 to move higher towards 26500.
Nifty (23,329.00, -0.43%) faced rejection near 23500 and fell sharply to test a low of 23285 before closing. It needs to stay above 23300 to move towards 23500 in the next session. A decisive break above 23500 would take the index towards 23800 in the coming week.
Nikkei (66660, -0.54%) is holding below the immediate resistance near 67000. If this resistance holds, a pullback can be seen. Otherwise, a break above 67000 would trigger a fresh rally towards 69000-70000.
Shanghai (3943.90, -0.21%) is attempting to break above 3950, as mentioned yesterday. A sustained break above this level would initiate a rise towards 4000-4050.
Brent and WTI have fallen amid US-Iran diplomatic talks, with $ 98-$ 96 and $ 90-$ 88 acting as crucial support regions. Gold needs to break above $ 4450 for a rise towards $ 4500-$ 4600. Silver can rise towards $ 68-$ 70 while above $ 63. Copper has surged but remains crucially placed around $ 6.80. Natural Gas has moved above $ 3.00 and can rise towards $ 3.20-$ 3.40 if sustained.
Brent ($ 98.91) and WTI ($ 89.96) have fallen further amid US-Iran diplomatic talks at the UN meeting. The support regions near $ 98-$ 96 and $ 90-$ 88 remain crucial. A break below these levels would trigger further bearishness.
Gold ($ 4375.60) is failing to break above $ 4450. It needs a break above this level to rise towards $ 4500-$ 4600. Otherwise, it can fall back towards $ 4300.
Silver ($ 67.03) can rise towards $ 68-$ 70 while above $ 63.
Copper ($ 6.83) has exceeded our expectations and surged to a high of $ 6.91 yesterday. It is falling sharply today and needs to hold above $ 6.80. A break below $ 6.80 could trigger further downside. Otherwise, it can move higher towards $ 7.00-$ 7.20 in the coming weeks.
Natural Gas ($ 3.03) has moved up sharply amid lower supply concerns. It needs to sustain above $ 3.00 for a further rise towards $ 3.20-$ 3.40. Otherwise, it can fall back within the earlier mentioned $ 2.80-$ 3.00 range.
5:00 10:30 IN Flash Manufacturing PMI
…Previous 52.8
5:00 10:30 IN Flash Services PMI
…Previous 54.1
8:00 13:30 EU Flash PMI
…Expected 52.6 …Previous 52.7
8:30 14:00 UK Flash PMI
…Expected51.4 …Previous51.7
DATA Yesterday:-
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No major data release yesterday.
