Currencies have moved contrary to our near term expectations, reversing the immediate trends seen yesterday. The Dollar index rose back above 102 much faster than expected while Euro tested 1.1164 before bouncing back to current levels. A sustained break below 1.12 can be strongly bearish. USDJPY has dipped back into the 156-159 zone while EURJPY can trade between 176-178. EURINR could trade between 107.50-109 region for the next couple of weeks while the USDINR has scope to rise towards 97. RBI indeed hiked rates by 25bps as expected. USDCNY has opened lower today and can dip towards 6.69 on a break below 6.70.
Dollar Index (102.18) has moved back above 102 contrary to our expectation of seeing a dip towards 101.50-101. While above 102, view is bullish.
EURUSD (1.1206) trades above 1.12 after testing 1.1164. If Euro does not sustain above 1.12 and bounce back immediately, it can be further bearish towards 1.11/10 in the coming weeks. Overall view is bearish below 1.13.
Dollar-Yen (157.83) broke above immediate resistance yesterday at 158.35 and moved up to test 158.50 which looked like a near term breakout but the pair has fallen back below 158.35 today. This has moved contrary to our expectation and while below 158.35, we may expect trade between 157-158.35 for the near term. Only a sustained break on the upside will being in our higher targets of 159-160.
EURJPY (176.85) has fallen back sharply contrary to our expectations and could trade within the 178-176 region with chances of further decline on a break below 176, if seen.
EURINR (108.4323) looks stable. We may expect a broad trade range of 107.50-109 to hold for the medium term.
USDCNY (6.7008) trades lower after a weeklong China Holiday. View is bearish towards 6.69.
Aussie (0.6965) is holding just below an interim resistance near 0.70 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 (1.3218) tested 1.3193 yesterday which may act as a decent support for the near term. It would be crucial for Pound to remain above 1.32 else can be vulnerable to a bearish decline in the medium term. Watch price action at 1.32.
USDINR (96.6580) moved up to test 96.85, signalling a clear breakout once it breached the resistance zone of 96.35/50. We could expect some intervention from the central bank at around 97 but it may not hold strong and could see limited dip to 96.50. Overall view is strongly bullish.
The US Treasury and the German Yields remain stable. The Treasury yields are looking bullish and can rise more from here. The German Yields on the other hand may dip to test their support first. Thereafter the broader upmove can resume. The 10Yr GoI has risen well yesterday. The outlook remains bullish. The yields can rise more going forward. The RBI raised the interest rate by 25 bps yesterday in line with market expectation.
The US 10Yr (5.29%) and 30Yr (5.68%) yields remain higher but stable. The upside remains open to see 5.35%-5.4% (10Yr) and 5.7%-5.75% (30Yr) now and much higher levels eventually in the long term. Support is at 5.15%-5.1% (10Yr) and 5.55%-5.5% (30Yr).
The German 10Yr (3.47%) and 30Yr (3.85%) Yields remain stable. A dip to 3.35% (10Yr) and 3.75% (3Yr) still looks a possibility before the broader upmove resumed to target 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.2410%) touched a high of 7.2655% and has come down slightly. While above 7.2%, there is room to see 7.3% now. There is potential to see 7.5% as well over the long-term while above 7.15%-7.1%.
Dow and DAX remain weak below 51500 and 25500, with downside towards 50500-50000 and 25000-24800. Nifty can fall towards 22250 below 22600. Nikkei has weakened below 70000 and can decline towards 69000-68000. Shanghai has opened strongly and can gradually rise towards 3900-3950.
Dow (51185.13, -0.66%) has pulled back sharply to a low of 50922 yesterday. A further decline towards 50500-50000 can be seen in the coming sessions while below 51500.
DAX (25104.36, +0.77%) has pulled back sharply as mentioned after failing to breach 25500. A further decline towards 25000-24800 can be seen in the coming sessions.
Nifty (22,603.05, -0.76%) tested a low of 22546 before closing higher. Although it looks weak around 22600, a sustained break below this level can drag the index towards 22250 in the coming weeks.
Nikkei (69443, -0.31%) has broken below 70000, and the near-term uptrend could have paused for now. A further fall towards 69000-68000 can be seen in the near term.
Shanghai (3861.55, +0.50%) has opened strongly after a week-long holiday and can gradually move higher towards 3900-3950.
Crude prices have eased after the EIA cut its 2026 global crude demand forecast. Brent and WTI can rise towards $ 105-$ 110 and $ 95-$ 100 while above support. Gold needs to sustain above $ 4100 for a rise towards $ 4300-$ 4400. Silver needs to hold $ 60 for a rise towards $ 63-$ 65. Copper can rise towards $ 6.80-$ 6.85, while Natural Gas can rise towards $ 3.30-$ 3.50.
Brent ($ 101.45) and WTI ($ 89.28) erased their early gains on Wednesday and settled lower. This followed signs of weakening global energy demand after the EIA cut its 2026 global crude demand forecast. While the respective support levels hold, we retain our view of a rise towards $ 105-$ 110 and $ 95-$ 100, respectively, in the near term.
Gold ($ 4157.30) 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 ($ 60.64) 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 ($ 6.75) has risen as expected and can rise further towards $ 6.80-$ 6.85 in the near term.
Natural Gas ($ 3.2630) has risen above $ 3.20 in line with our expectations and can rise further towards $ 3.30-$ 3.50.
No major data release today.
DATA YESTERDAY:-
—————-
AU PMI
…Previous -16.6 …Actual-8.7
RBI Repo Rate
Exp. 5.50 % …Expected 5.50 % …Previous 5.25 % …Actual 5.50 %
RBI Rev Repo Rate
…Previous 3.35 % …Actual 3.35 %
RBI MSF
…Previous 5.50 % …Actual 5.75 %
