The Dollar index has seen a pull back but could be limited to 101.50-101 before again resuming the upmove while Euro is bearish below 1.13 and can see trade between 1.13-1.12 in the near term before eventually breaking lower. USDJPY can see a slow rise to 159-160 while EURJPY can test 180/181. EURINR could trade between 107.50-109 region for the next couple of weeks while the USDINR has scope to test rise towards 96.75/97.00 on a decisive break above 96.50. Crucial trigger for the rise would be a sustained rise in crude oil prices above $ 100. RBI monetary policy is due today where the market expects a 25bps rate hike which is already priced in. A surprise “no change” in the rates could bring in some weakness in the Rupee beyond 96.50. Else if the 25bps rate hike happens as expected, we could see a stable USDINR below 96.50 today also.
Having tested 102.50 recently, Dollar Index (101.976) has indeed dipped as expected and the dip can extend to 101.50 or even 101 before a rebound is seen back towards 102 or higher. Preference is to see ana eventual rise above 102 in the longer run for fresh bullishness to set in.
EURUSD (1.1240) could rise to 1.13 from support at 1.12 for the very near term within a long-term bearish trend.
Dollar-Yen (158.39) seems to be rising slowly and can soon test 159-160 again in the medium term while EURJPY (178.03) has risen back above the very near-term resistance at 178 and while that holds, a slow rise towards 180-181 could again come into the picture. But if it falls back below 178, the preferred bearishness will set in.
EURINR (108.4135) did recover well from 107.50 but could now have resistance near 108.75-109 which if holds can take it down towards 107.50-107 again in the medium term. A decisive break above 108.75-109 is needed for a revival of an upmove.
Aussie (0.6978) is holding just below an interim resistance and needs to break on the upside to avoid another decline towards 0.69 in the near term. Watch price action near current levels.
Pound (1.3253) has also dipped from levels seen yesterday. Trade between 1.32 and 1.33 can hold for the near term. A decisive breakout above 1.33 thereafter will be needed for a bullish breakout.
USDINR (96.36) could see a dip back towards 96.20-96.00, if resistance near 96.35/50 holds in the next few sessions. However, a break above these two immediate resistances will pave way for a straight rise to 97. The pull back in the prices can be possible only if crude prices come down below $ 98 (Brent Crude) and sustains. Else, while Bret remains above $ 100/barrel, USDINR can be bullish.
The US Treasury Yields hold higher. Outlook remains bullish and the yields can rise more from here. The German Yields have dipped slightly. Failure to rise back immediately can drag them further lower to test their support. Thereafter the broader upmove can resume. The 10Yr GoI sustains higher. Outlook is bullish. It has room to rise further from here. The RBI’s monetary policy outcome today will need a close watch.
The US 10Yr (5.29%) and 30Yr (5.67%) yields sustain higher. While above 5.15%-5.1% (10Yr) and 5.55%-5.5% (30Yr), a rise to 5.35%-5.4% (10Yr) and 5.7%-5.75% (30Yr) can be seen now and much higher levels eventually in the long term.
The German 10Yr (3.47%) and 30Yr (3.84%) Yields have dipped slightly. Failure to rise back immediately can drag them to test their support at 3.35% (10Yr) and 3.75% (3Yr). However, the outlook will remain bullish, and the upside will be open to see 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.2239%) is holding higher. 7.25%-7.3% can be tested and the price action thereafter will need a watch to see if the yield is turning down or not. Support is at 7.15% and 7.1%.
Dow can test 52000, but a pullback looks likely thereafter. DAX needs to break 25500 for 25800-26000, otherwise it can fall towards 25000. Nifty remains positive above 22600 and can rise towards 23000. Nikkei remains bullish towards 72000 while above 70000. Shanghai resumes trading on October 8.
Dow (51526.12, +0.49%) has risen above 51500 and can test 52000 in the coming sessions. Thereafter, it remains to be seen whether it breaks above 52000 or pulls back. The chances of a pullback look likely.
DAX (25449.19, +0.77%) is testing 25500 and needs a sustained break above this level to turn decisively bullish. This would open the way towards 25800-26000. While below 25500, it remains vulnerable to a fall towards 25000 in the coming session.
Nifty (22,776.10, +0.98%) remains firm above 22600 and advanced to test the session high of 22776 before closing. As long as it holds above 22600, further upside towards 23000 can be expected over the week.
Nikkei (70356.61, -0.76%) has pulled back from yesterday’s high of 71366. Our view remains intact for a rise towards 72000 and higher. Only a decisive break below 70000 would negate our bullish view and open the way towards 66500-66000.
Shanghai (3842.19, +0.31%) remains closed for the Golden Week holiday and will resume normal trading on Thursday, October 8, 2026.
Brent and WTI remain positive above support and can rise towards $ 105-$ 110 and $ 95-$ 100. Gold needs to sustain above $ 4100 for a rise towards $ 4300-$ 4400, otherwise it can fall towards $ 4000. Silver needs to hold $ 60 for a rise towards $ 63-$ 65. Copper can rise towards $ 6.75-$ 6.80, while Natural Gas can rise towards $ 3.15-$ 3.20.
Brent ($ 101.59) and WTI ($ 90.35) have dipped to test their respective support levels. Both erased early losses on Tuesday and settled higher as short covering emerged. This followed reports that Iran had ramped up attacks on tankers in the Strait of Hormuz. While these supports hold, we retain our view of a rise towards $ 105-$ 110 and $ 95-$ 100, respectively, in the near term.
Gold ($ 4181.20) hovers above its immediate support and needs to sustain above it. This would support a rise towards $ 4300-$ 4400. Otherwise, a break below $ 4100 could extend the fall towards $ 4000 or lower.
Silver ($ 61.53) needs to hold above $ 60 to keep alive the chances of a rise towards $ 63-$ 65. Otherwise, a break below $ 60 would trigger further bearishness.
Copper ($ 6.66) can rise towards $ 6.75-$ 6.80 in the near term.
Natural Gas ($ 3.13) has risen above $ 3.10 in line with our expectations and can rise further towards $ 3.15-$ 3.20.
22:30 04:00 AU PMI
…Previous -16.6
4:30 10:00 RBI Repo Rate
…Expected 5.50 % …Previous 5.25%
4:30 10:00 RBI Rev Repo Rate
…Previous 3.35%
4:30 10:00 RBI MSF
…Previous 5.50 %
DATA YESTERDAY:-
—————
IN Services PMI
Expn 54.6 …Expected 55.8…Previous55.8 …Actual55.2
EU Retail Sales
…Expected 0.30 % …Previous -0.57 %
US Trade Balance
Expn.-76.6 $ bln …Expected -95.2 $ bln …Previous-88.6
